EXHIBIT-10.75


 


[EXECUTION COPY]




 





 


 


AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT


 


Dated as of March 26, 2004


 


Among


 


SYRATECH CORPORATION


 


(the Borrower)


 


THE FINANCIAL INSTITUTIONS
PARTIES


 


HERETO FROM TIME TO TIME


 


(the Lenders)


 


and


 


BANK OF AMERICA, N.A.


 


(the Administrative Agent)


 




 





 

















 


TABLE OF CONTENTS(1)


 


	
  ARTICLE
  1

  DEFINITIONS

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1

  	
  DEFINITIONS

  	
   

  
	
  SECTION 1.2

  	
  OTHER REFERENTIAL PROVISIONS.

  	
   

  
	
  SECTION 1.3

  	
  EXHIBITS AND SCHEDULES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  2

  REVOLVING CREDIT FACILITY

  
	
   

  	
   

  	
   

  
	
  SECTION 2.1

  	
  REVOLVING CREDIT LOANS

  	
   

  
	
  SECTION 2.2

  	
  MANNER OF BORROWING REVOLVING CREDIT LOANS

  	
   

  
	
  SECTION 2.3

  	
  REPAYMENT OF REVOLVING CREDIT LOANS

  	
   

  
	
  SECTION 2.4

  	
  REVOLVING CREDIT NOTE

  	
   

  
	
  SECTION 2.5

  	
  REDUCTION OF FACILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  3

  LETTER OF CREDIT FACILITY

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1

  	
  AGREEMENT TO ISSUE

  	
   

  
	
  SECTION 3.2

  	
  AMOUNTS

  	
   

  
	
  SECTION 3.3

  	
  CONDITIONS

  	
   

  
	
  SECTION 3.4

  	
  ISSUANCE OF LETTERS OF CREDIT.

  	
   

  
	
  SECTION 3.5

  	
  DUTIES OF BANK OF AMERICA

  	
   

  
	
  SECTION 3.6

  	
  PAYMENT OF REIMBURSEMENT OBLIGATIONS.

  	
   

  
	
  SECTION 3.7

  	
  PARTICIPATIONS.

  	
   

  
	
  SECTION 3.8

  	
  INDEMNIFICATION, EXONERATION.

  	
   

  
	
  SECTION 3.9

  	
  SUPPORTING LETTER OF CREDIT; CASH
  COLLATERAL ACCOUNT

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  4

  GENERAL LOAN PROVISIONS

  
	
   

  	
   

  	
   

  
	
  SECTION 4.1

  	
  INTEREST.

  	
   

  
	
  SECTION 4.2

  	
  CERTAIN FEES.

  	
   

  
	
  SECTION 4.3

  	
  MANNER OF PAYMENT.

  	
   

  
	
  SECTION 4.4

  	
  GENERAL

  	
   

  
	
  SECTION 4.5

  	
  LOAN ACCOUNTS; STATEMENTS OF ACCOUNT.

  	
   

  
	
  SECTION 4.6

  	
  TERMINATION OF AGREEMENT

  	
   

  
	
  SECTION 4.7

  	
  MAKING OF LOANS.

  	
   

  
	
  SECTION 4.8

  	
  SETTLEMENT AMONG LENDERS.

  	
   

  
	
  SECTION 4.9

  	
  PREPAYMENT FEE

  	
   

  
	
  SECTION 4.10

  	
  PAYMENTS NOT AT END OF INTEREST PERIOD;
  FAILURE TO BORROW

  	
   

  
	
  SECTION 4.11

  	
  ASSUMPTIONS CONCERNING FUNDING OF LIBOR
  RATE LOANS

  	
   

  



 












(1)           This Table of Contents
is included for reference purposes only and does not constitute part of the
Loan and Security Agreement.


 


i

















 


	
  SECTION 4.12

  	
  NOTICE OF CONVERSION OR CONTINUATION

  	
   

  
	
  SECTION 4.13

  	
  CONVERSION OR CONTINUATION

  	
   

  
	
  SECTION 4.14

  	
  DURATION OF INTEREST PERIODS; MAXIMUM
  NUMBER OF LIBOR RATE LOANS; MINIMUM INCREMENTS.

  	
   

  
	
  SECTION 4.15

  	
  CHANGED CIRCUMSTANCES.

  	
   

  
	
  SECTION 4.16

  	
  CASH COLLATERAL ACCOUNT.

  	
   

  
	
  SECTION 4.17

  	
  FUNDS TRANSFER SERVICES.

  	
   

  
	
  SECTION 4.18

  	
  BANK PRODUCTS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  5

  CONDITIONS PRECEDENT

  
	
   

  	
   

  	
   

  
	
  SECTION 5.1

  	
  CONDITIONS PRECEDENT TO EFFECTIVENESS

  	
   

  
	
  SECTION 5.2

  	
  CONDITIONS TO ALL LOANS, LETTERS OF CREDIT

  	
   

  
	
  SECTION 5.3

  	
  EFFECT OF EFFECTIVENESS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  6

  REPRESENTATIONS AND WARRANTIES OF THE BORROWER

  
	
   

  	
   

  	
   

  
	
  SECTION 6.1

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  SECTION 6.2

  	
  SURVIVAL OF REPRESENTATIONS AND WARRANTIES,
  ETC

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  7

  SECURITY INTEREST

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1

  	
  SECURITY INTEREST.

  	
   

  
	
  SECTION 7.2

  	
  CONTINUED PRIORITY OF SECURITY INTEREST.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  8

  COLLATERAL COVENANTS

  
	
   

  	
   

  	
   

  
	
  SECTION 8.1

  	
  COLLECTION OF RECEIVABLES.

  	
   

  
	
  SECTION 8.2

  	
  VERIFICATION AND NOTIFICATION

  	
   

  
	
  SECTION 8.3

  	
  DISPUTES, RETURNS AND ADJUSTMENTS.

  	
   

  
	
  SECTION 8.4

  	
  INVOICES

  	
   

  
	
  SECTION 8.5

  	
  DELIVERY OF INSTRUMENTS

  	
   

  
	
  SECTION 8.6

  	
  SALES OF INVENTORY

  	
   

  
	
  SECTION 8.7

  	
  RETURNED GOODS

  	
   

  
	
  SECTION 8.8

  	
  OWNERSHIP AND DEFENSE OF TITLE.

  	
   

  
	
  SECTION 8.9

  	
  INSURANCE.

  	
   

  
	
  SECTION 8.10

  	
  LOCATION OF OFFICES AND COLLATERAL.

  	
   

  
	
  SECTION 8.11

  	
  RECORDS RELATING TO COLLATERAL.

  	
   

  
	
  SECTION 8.12

  	
  INSPECTION

  	
   

  
	
  SECTION 8.13

  	
  APPRAISALS AND FIELD EXAMS

  	
   

  
	
  SECTION 8.14

  	
  INFORMATION AND REPORTS.

  	
   

  
	
  SECTION 8.15

  	
  POWER OF ATTORNEY

  	
   

  



 


ii

















 


	
  ARTICLE
  9

  AFFIRMATIVE COVENANTS

  
	
   

  	
   

  	
   

  
	
  SECTION 9.1

  	
  PUNCTUAL PAYMENTS

  	
   

  
	
  SECTION 9.2

  	
  PRESERVATION OF CORPORATE EXISTENCE AND
  SIMILAR MATTERS

  	
   

  
	
  SECTION 9.3

  	
  COMPLIANCE WITH APPLICABLE LAW

  	
   

  
	
  SECTION 9.4

  	
  MAINTENANCE OF PROPERTY

  	
   

  
	
  SECTION 9.5

  	
  CONDUCT OF BUSINESS

  	
   

  
	
  SECTION 9.6

  	
  INSURANCE

  	
   

  
	
  SECTION 9.7

  	
  PAYMENT OF TAXES AND CLAIMS

  	
   

  
	
  SECTION 9.8

  	
  ACCOUNTING METHODS AND FINANCIAL RECORDS

  	
   

  
	
  SECTION 9.9

  	
  VISITS AND INSPECTIONS

  	
   

  
	
  SECTION 9.10

  	
  USE OF PROCEEDS.

  	
   

  
	
  SECTION 9.11

  	
  SUBSIDIARY GUARANTIES

  	
   

  
	
  SECTION 9.12

  	
  HAZARDOUS WASTE AND SUBSTANCES

  	
   

  
	
  SECTION 9.13

  	
  MERGER OF RAUCH

  	
   

  
	
  SECTION 9.14

  	
  ASSUMPTION OF OBLIGATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  10

  INFORMATION

  
	
   

  	
   

  	
   

  
	
  SECTION 10.1

  	
  FINANCIAL STATEMENTS.

  	
   

  
	
  SECTION 10.2

  	
  ACCOUNTANTS’ CERTIFICATE

  	
   

  
	
  SECTION 10.3

  	
  OFFICER’S CERTIFICATE

  	
   

  
	
  SECTION 10.4

  	
  COPIES OF OTHER REPORTS.

  	
   

  
	
  SECTION 10.5

  	
  NOTICE OF LITIGATION AND OTHER MATTERS

  	
   

  
	
  SECTION 10.6

  	
  ERISA

  	
   

  
	
  SECTION 10.7

  	
  REVISIONS OR UPDATES TO SCHEDULES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  11

  NEGATIVE COVENANTS

  
	
   

  	
   

  	
   

  
	
  SECTION 11.1

  	
  FINANCIAL RATIOS.

  	
   

  
	
  SECTION 11.2

  	
  DEBT

  	
   

  
	
  SECTION 11.3

  	
  GUARANTIES

  	
   

  
	
  SECTION 11.4

  	
  INVESTMENTS

  	
   

  
	
  SECTION 11.5

  	
  CAPITAL EXPENDITURES

  	
   

  
	
  SECTION 11.6

  	
  RESTRICTED DISTRIBUTIONS AND PAYMENTS, ETC

  	
   

  
	
  SECTION 11.7

  	
  MERGER, CONSOLIDATION AND SALE OF ASSETS

  	
   

  
	
  SECTION 11.8

  	
  TRANSACTIONS WITH AFFILIATES

  	
   

  
	
  SECTION 11.9

  	
  LIENS

  	
   

  
	
  SECTION 11.10

  	
  BENEFIT

  	
   

  
	
  SECTION 11.11

  	
  CHANGE IN BUSINESS

  	
   

  
	
  SECTION 11.12

  	
  CHANGE IN ACCOUNTING POLICIES

  	
   

  
	
  SECTION 11.13

  	
  AMENDMENT TO SENIOR NOTE DOCUMENTS

  	
   

  
	
  SECTION 11.14

  	
  MINIMUM AVAILABILITY

  	
   

  



 


iii

















 


	
  ARTICLE
  12

  DEFAULT

  
	
   

  	
   

  	
   

  
	
  SECTION 12.1

  	
  EVENTS OF DEFAULT

  	
   

  
	
  SECTION 12.2

  	
  REMEDIES.

  	
   

  
	
  SECTION 12.3

  	
  APPLICATION OF PROCEEDS

  	
   

  
	
  SECTION 12.4

  	
  POWER OF ATTORNEY

  	
   

  
	
  SECTION 12.5

  	
  MISCELLANEOUS PROVISIONS CONCERNING
  REMEDIES.

  	
   

  
	
  SECTION 12.6

  	
  PROPRIETARY RIGHTS LICENSE

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  13

  ASSIGNMENTS

  
	
   

  	
   

  	
   

  
	
  SECTION 13.1

  	
  SUCCESSORS AND ASSIGNS; PARTICIPATIONS.

  	
   

  
	
  SECTION 13.2

  	
  REPRESENTATION OF LENDERS

  	
   

  
	
  SECTION 13.3

  	
  NON-U.S. LENDERS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  14

  ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  
	
  SECTION 14.1

  	
  APPOINTMENT OF AGENT

  	
   

  
	
  SECTION 14.2

  	
  DELEGATION OF DUTIES

  	
   

  
	
  SECTION 14.3

  	
  EXCULPATORY PROVISIONS

  	
   

  
	
  SECTION 14.4

  	
  RELIANCE BY AGENT

  	
   

  
	
  SECTION 14.5

  	
  NOTICE OF DEFAULT

  	
   

  
	
  SECTION 14.6

  	
  NON-RELIANCE ON AGENTS AND OTHER LENDERS

  	
   

  
	
  SECTION 14.7

  	
  INDEMNIFICATION

  	
   

  
	
  SECTION 14.8

  	
  AGENT IN ITS INDIVIDUAL CAPACITY

  	
   

  
	
  SECTION 14.9

  	
  SUCCESSOR AGENT

  	
   

  
	
  SECTION 14.10

  	
  NOTICES FROM AGENT TO LENDERS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  15

  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  SECTION 15.1

  	
  NOTICES.

  	
   

  
	
  SECTION 15.2

  	
  EXPENSES

  	
   

  
	
  SECTION 15.3

  	
  STAMP AND OTHER TAXES

  	
   

  
	
  SECTION 15.4

  	
  SETOFF

  	
   

  
	
  SECTION 15.5

  	
  GOVERNING LAW; CHOICE OF FORUM; SERVICE OF
  PROCESS.

  	
   

  
	
  SECTION 15.6

  	
  WAIVER OF JURY TRIAL

  	
   

  
	
  SECTION 15.7

  	
  WAIVER OF RIGHTS

  	
   

  
	
  SECTION 15.8

  	
  REVERSAL OF PAYMENTS

  	
   

  
	
  SECTION 15.9

  	
  ACCOUNTING MATTERS

  	
   

  
	
  SECTION 15.10

  	
  AMENDMENTS

  	
   

  
	
  SECTION 15.11

  	
  PERFORMANCE OF BORROWER’S DUTIES.

  	
   

  
	
  SECTION 15.12

  	
  INDEMNIFICATION

  	
   

  
	
  SECTION 15.13

  	
  ALL POWERS COUPLED WITH INTEREST

  	
   

  
	
  SECTION 15.14

  	
  SURVIVAL

  	
   

  



 


iv

















 


	
  SECTION 15.15

  	
  TITLES AND CAPTIONS

  	
   

  
	
  SECTION 15.16

  	
  SEVERABILITY OF PROVISIONS

  	
   

  
	
  SECTION 15.17

  	
  COUNTERPARTS

  	
   

  
	
  SECTION 15.18

  	
  REPRODUCTION OF DOCUMENTS

  	
   

  
	
  SECTION 15.19

  	
  PRO-RATA PARTICIPATION.

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS AND SCHEDULES

  	
   

  
	
   

  	
   

  
	
  ANNEX A

  	
  COMMITMENTS

  	
   

  
	
  ANNEX B

  	
  WIRE TRANSFER PROCEDURES

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  FORM OF REVOLVING CREDIT NOTE

  	
   

  
	
  EXHIBIT B

  	
  FORM OF BORROWING BASE CERTIFICATE

  	
   

  
	
  EXHIBIT C

  	
  FORM OF OPINION OF COUNSEL FOR BORROWER

  	
   

  
	
  EXHIBIT D

  	
  FORM OF ASSIGNMENT AND ACCEPTANCE

  	
   

  
	
  EXHIBIT E

  	
  FORM OF SETTLEMENT REPORT

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 6.1(b)

  	
  Subsidiaries; Ownership of Stock

  	
   

  
	
  Schedule 6.1(d)

  	
  Compliance with Law; Governmental Approvals

  	
   

  
	
  Schedule 6.1(e)

  	
  Borrower’s Businesses

  	
   

  
	
  Schedule 6.1(f)

  	
  Title to Properties

  	
   

  
	
  Schedule 6.1(g)

  	
  Liens

  	
   

  
	
  Schedule 6.1(h)

  	
  Indebtedness and Guaranties

  	
   

  
	
  Schedule 6.1(i)

  	
  Litigation

  	
   

  
	
  Schedule 6.1(j)

  	
  Proprietary Rights

  	
   

  
	
  Schedule 6.1(o)

  	
  ERISA

  	
   

  
	
  Schedule 6.1(u)

  	
  Location of Offices and Receivables

  	
   

  
	
  Schedule 6.1(v)

  	
  Location of Inventory

  	
   

  
	
  Schedule 6.1(x)

  	
  Employee Relations

  	
   

  
	
  Schedule 6.1(y)

  	
  Trade Names

  	
   

  
	
  Schedule 6.1(z)

  	
  Real Estate

  	
   

  
	
  Schedule 6.1(aa)

  	
  Bank Accounts, Lockboxes, Etc.

  	
   

  
	
  Schedule 9.10

  	
  Use of Proceeds

  	
   

  
					



 


v

















 


AMENDED AND RESTATED LOAN
AND SECURITY AGREEMENT


 


Dated as of March 26, 2004


 


SYRATECH CORPORATION, a Delaware corporation, the
financial institutions parties hereto from time to time as Lenders, and BANK OF
AMERICA, N.A., a national banking association as the Administrative Agent for
the Lenders, agree as follows:


 


PRELIMINARY STATEMENT


 


The Borrower, the Lender and the Administrative Agent
are parties to the Loan and Security Agreement dated as of April 16, 1997,
as amended (the “Existing Loan Agreement”).


 


The Existing Loan Agreement by its terms expires on
April 15, 2004.  The Borrower has
requested that the Administrative Agent and the Lenders amend the Existing Loan
Agreement and extend its Termination Date. 
For the convenience of the parties and without any intention to effect a
repayment or novation of the Secured Obligations outstanding under the Existing
Loan Agreement, the parties have agreed to effect such amendments and extension
by amending and restating the Existing Loan Agreement in its entirety.


 


STATEMENT OF AGREEMENT


 


Accordingly, in consideration of the Existing Loan
Agreement, the financial accommodations outstanding thereunder, the mutual
promises hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:


 


ARTICLE 1


 


DEFINITIONS


 


Section 1.1             Definitions.  For the purposes of this Agreement:


 


Account Debtor
means a Person who is obligated on a Receivable.


 


ACH Transactions
means any cash management or related services including the automatic clearing
house transfer of funds by Bank of America for the account of the Borrower
pursuant to agreement or overdrafts.


 


Acquire
or Acquisition, as
applied to any Business Unit or Investment, means the acquisition of such
Business Unit or Investment by purchase, exchange, issuance of stock or other
securities, or by merger, reorganization or any other method.


 


Administrative
Agent means Bank of America, N.A. and each successor
Administrative Agent appointed in accordance with the provisions of this
Agreement.


 


Affiliate
(and with corollary meanings, Affiliated) means, with respect to a Person, (a) any
officer, director, manager, or managing agent of such Person, (b) any spouse,


 

















 


parents, brothers,
sisters, children and grandchildren of such Person, (c) any association,
partnership, trust, entity or enterprise in which such Person is a director,
officer or general partner, (d) any other Person, (i) that directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such given Person, (ii) that directly or
indirectly beneficially owns or holds 10% or more of any class of voting stock,
member interest or partnership or other interest of such Person or any
Subsidiary of such Person, or (iii) 10% or more of the voting stock,
member interest or partnership or other interest of which is directly or
indirectly beneficially owned or held by such Person or a Subsidiary of such
Person.  The term “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities or partnership or other interests, by contract or
otherwise.


 


Agency Account
means an account of one or more Borrower maintained with a Clearing Bank
pursuant to an Agency Account Agreement.


 


Agency Account
Agreement means an agreement among Borrower, the
Administrative Agent and a Clearing Bank (if other than the Administrative
Agent) concerning the collection of payments which represent the proceeds of
Receivables or other Collateral.


 


Agent’s Office
means the office of the Administrative Agent specified in or determined in
accordance with the provisions of Section 15.1.


 


Agreement
means this Agreement, including the Exhibits and Schedules hereto.


 


Agreement Date
means the date as of which this Agreement is dated.


 


Anniversary
means March 26, 2005 and each March 26 thereafter.


 


Applicable Law
means all applicable provisions of constitutions, statutes, rules, regulations
and orders of all applicable governmental bodies and all applicable orders and
decrees of all courts and arbitrators.


 


Applicable Margin
means (a) as to Base Rate Loans, 1.00%, and (b) as to LIBOR Rate Loans,
3.0%; provided, however, (x) if the Pricing Fixed Charge
Coverage Ratio calculated for the four Fiscal Quarter period most recently
ended exceeds 1:00 to 1:00, the Applicable Margin shall be decreased, effective
on the fifth Business Day following delivery of financial statements in
accordance with Section 10.1(b),
(i) as to Base Rate Loans, to 0.5%, and (ii) as to LIBOR Rate Loans, to 2.50%,
and (y) if Fixed Charges exceed Pricing EBITDA by more than $5,000,000 for the
twelve (12) month period ending June 30, 2005 or for any twelve (12) month
period ending at the end of any Fiscal Quarter thereafter, the Applicable
Margin shall be increased, effective on July 1, 2005 or the day
immediately following the last day of such subsequent Fiscal Quarter, as the
case may be, (i) as to Base Rate Loans, to 1.25%, and (ii) as to LIBOR Rate
Loans, to 3.75%.


 


Assignment and
Acceptance means an assignment and acceptance in the form
attached hereto as Exhibit D assigning all or a portion of a
Lender’s interests, rights and obligations under this Agreement pursuant to Section 13.1.


 


Authorized Officer has the meaning
specified in Section 2.2(a)(iii).


 


2

















 


Bank of America  means Bank of America, N.A., a national
banking association.


 


Bank Products means
any one or more of the following types of services or facilities extended to
the Borrower by a Lender or any Affiliate of a Lender in reliance on such
Lender’s agreement to indemnify such Affiliate:  (i) credit cards; (ii) ACH Transactions; (iii) cash management,
including controlled disbursement services; and (iv) Interest Rate Protection
Agreements.


 


Bank Product
Reserve means any reserve which the Administrative Agent
from time to time establishes in its reasonable discretion for the Bank
Products then provided or outstanding.


 


Bankers Acceptance
means a draft presented in connection with a drawing under a Letter of Credit
by the beneficiary thereof, maturing not more than 180 days after presentation
and accepted by the issuer of the Letter of Credit.


 


Bankruptcy Code means
Title 11 of the United States Code (11 U.S.C. § 101 et  seq.).


 


Base Rate means,
for any day, the rate of interest in effect for such day as publicly announced
from time to time by Bank of America in Charlotte, North Carolina as its “prime
rate” (the “prime rate” being a rate set by Bank of America based upon various
factors including the Bank of America’s costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate).  Any change in the prime rate
announced by Bank of America shall take effect at the opening of business on
the day specified in the public announcement of such change.  Each interest rate based upon the Base Rate
shall be adjusted simultaneously with any change in the Base Rate.


 


Base Rate Loan means
a Revolving Loan bearing interest determined with reference to the Base Rate.


 


Benefit Plan
means an employee benefit plan as defined in Section 3(3) of ERISA (other than
a Multiemployer Plan) in respect of which any Borrower or any Related Company
is, or within the immediately preceding six years was, an “employer” as defined
in Section 3(5) of ERISA, including such plans as may be established after the
Agreement Date.


 


Borrower
means Syratech.


 


Borrowing
means a borrowing of Revolving Credit Loans bearing interest at the same rate,
made by all Lenders on the same date and, in the case of LIBOR Rate Loans,
having a single Interest Period, and the continuation or conversion of an
existing Loan or Loans in whole or in part.


 


Borrowing Base
means, at any time, an amount equal to the following:


 


(a)           80% (or such lesser
percentage as the Administrative Agent may in its reasonable credit judgment,
applying standards customary to institutional asset-based lenders, determine
from time to time following any


 


3

















 


adverse change in
dilution or other measure of value of the Receivables (or any of them)) of the
face value of Eligible Receivables due and owing at such time, plus


 


(b)           the least of


 


(i)            the
Inventory Limit, and


 


(ii)           60% (or such lesser
percentage as the Administrative Agent may in its reasonable credit judgment,
applying standards customary to institutional asset-based lenders, determine
from time to time following any adverse change in quality, composition,
salability or other measure of value of the Inventory) of the Cost of Eligible
Inventory at such time, and


 


(iii)          the
Inventory Base (as adjusted from time to time by the Administrative Agent in
its reasonable credit judgment), minus


 


(c)           the sum of (i) the
Reimbursement Obligations of the Borrowers at such time, plus (ii) the aggregate
Letter of Credit Amount of standby Letters of Credit outstanding at such time, plus
(iii) 40% (or such greater or lesser percentage derived by subtracting from
100% the then applicable advance rate against Eligible Inventory) of the
aggregate Letter of Credit Amount of Inventory Letters of Credit at such time, plus
(iv) the aggregate Letter of Credit amount of Letters of Credit the issuance of
which has been authorized by the Administrative Agent and Bank of America
pursuant to Section 3.4(b) but that have not yet been issued, minus


 


(d)           the Reserves.


 


Borrowing Base
Certificate means a certificate in the form attached
hereto as Exhibit
B or in such other form as may be acceptable to the Administrative
Agent from time to time.


 


Business Day
means any day other than a Saturday, Sunday or other day on which banks in
Atlanta, Georgia are authorized to close and, when used with respect to LIBOR
Rate Loans, means any such day on which dealings are also carried on in the applicable
interbank LIBOR market.


 


Business Unit
means the assets constituting the business, or a division or operating unit
thereof, of any Person.


 


Capital
Expenditures means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of assets (other
than assets which constitute a Business Unit) that are not, in accordance with
GAAP, treated as expense items for such Person in the year made or incurred, or
as a prepaid expense applicable to a future year or years.


 


Capitalized Lease
means a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP.


 


4

















 


Capitalized Lease
Obligation means Debt represented by obligations under a
Capitalized Lease, and the amount of such Debt shall be the capitalized amount
of such obligations determined in accordance with GAAP.


 


Cash Collateral
means cash or Cash Equivalents on which the Administrative Agent, for the
benefit of itself as Administrative Agent and the Lenders, has a first priority
Lien.


 


Cash Collateral
Account means a special interest-bearing deposit account
consisting of cash maintained by the Administrative Agent and under the sole
dominion and control of the Administrative Agent, for its benefit and for the
benefit of the Lenders, established pursuant to the provisions of Section 4.16(a)
for purposes set forth therein.


 


Cash Equivalents
means


 


(a)           marketable direct
obligations issued or unconditionally guaranteed by the United States Government
or issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof;


 


(b)           commercial paper
maturing no more than one year from the date issued and, at the time of
acquisition thereof, having a rating of at least A-1 from Standard & Poor’s
Corporation or at least P-1 from Moody’s Investors Service;


 


(c)           certificates of deposit
or bankers’ acceptances issued in Dollar denominations and maturing within one
year from the date of issuance thereof issued by any commercial bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia having combined capital and surplus of not less than
$100,000,000 and, unless issued by the Administrative Agent or a Lender, not
subject to set-off or offset rights in favor of such bank arising from any
banking relationship with such bank; and


 


(d)           repurchase agreements
in form and substance and for amounts satisfactory to the Administrative Agent.


 


Cash Interest
Expense means, as to any computation period, the amount
accrued for the interest payments with respect to Debt during such period,
including fees paid under this Agreement, other than such fees and expenses
paid solely in connection with the closing of the transactions contemplated
hereby on the Effective Date and excluding any payment in kind interest.


 


Chief Financial
Officer means the chief financial officer of Syratech.


 


Clearing Bank
means Bank of America and any other banking institution with which an Agency
Account has been established pursuant to an Agency Account Agreement.


 


Code
means the Internal Revenue Code of 1986, as amended from time to time.


 


Collateral
means and includes all of the Borrower’s right, title and interest in and to
each of the following, wherever located and whether now or hereafter existing
or now owned or hereafter acquired or arising:


 


5

















 


(a)           (i)  all rights to the payment of money or other
forms of consideration of any kind (whether classified under the UCC as
accounts, contract rights, chattel paper, general intangibles, payment
intangibles, or otherwise) including, but not limited to, accounts receivable,
letters of credit and the right to receive payment thereunder, chattel paper,
tax refunds, insurance proceeds, any rights under contracts not yet earned by
performance and not evidenced by an instrument or chattel paper, notes, drafts,
instruments, documents, acceptances and all other debts, obligations and
liabilities in whatever form from any Person, (ii) all guaranties, security and
Liens securing payment thereof, (iii) all goods, whether now owned or hereafter
acquired, and whether sold, delivered, undelivered, in transit or returned, which
may be represented by, or the sale or lease of which may have given rise to,
any such right to payment or other debt, obligation or liability, and (iv) all
proceeds of any of the foregoing (the foregoing, collectively, Receivables);


 


(b)           (i) all inventory, (ii)
all goods intended for sale or lease or for display or demonstration, (iii) all
work in process, (iv) all raw materials and other materials and supplies of
every nature and description used or which might be used in connection with the
manufacture, packing, shipping, advertising, selling, leasing or furnishing of
goods or services or otherwise used or consumed in the conduct of business, and
(v) all documents evidencing and general intangibles relating to any of the
foregoing (the foregoing, collectively, Inventory);


 


(c)           any demand, time,
savings, passbook, money market or like depository account, and all
certificates of deposit, maintained with a bank, savings and loan association,
credit union or like organization, other than an account evidenced by a
certificate of deposit that is an instrument under the UCC (the foregoing,
collectively, Deposit Accounts);


 


(d)           all cash or other
property deposited with the Administrative Agent or any Lender or any Affiliate
of the Administrative Agent or any Lender or which the Administrative Agent,
for its benefit and for the benefit of the Lenders, or any Lender or such
Affiliate is entitled to retain or otherwise possess as collateral pursuant to
the provisions of this Agreement or any of the Loan Documents or any agreement
relating to any Letter of Credit, including, without limitation, amounts on
deposit in the Cash Collateral Account;


 


(e)           all goods and other
personal property, whether or not delivered,


 


(i)            the
sale or lease of which gives or purports to give rise to any Receivable,
including, but not limited to, all merchandise returned or rejected by or
repossessed from customers, or


 


(ii)           securing
any Receivable,


 


including,
without limitation, all rights as an unpaid vendor or lienor (including,
without limitation, stoppage in transit, replevin and reclamation) with respect
to such goods and other properties;


 


(f)            all mortgages, deeds
to secure debt and deeds of trust on real or personal property, guaranties,
leases, security agreements and other agreements and property which secure or
relate to any Receivable or other Collateral or are acquired for the purpose of
securing and enforcing any item thereof;


 


6

















 


(g)           all documents of title,
including bills of lading and warehouse receipts policies and certificates of
insurance, securities, chattel paper and other documents and instruments
evidencing or pertaining to any and all items of Collateral;


 


(h)           all files,
correspondence, computer programs, tapes, disks and related data processing
software which contain information identifying or pertaining to any of the
Collateral or any Account Debtor or showing the amounts thereof or payments
thereon or otherwise necessary or helpful in the realization thereon or the collection
thereof; and


 


(i)            any and all products
and cash and non-cash proceeds of the foregoing (including, but not limited to,
any claims to any items referred to in this definition and any claims against
third parties for loss of, damage to or destruction of any or all of the
Collateral or for proceeds payable under or unearned premiums with respect to
policies of insurance) in whatever form, including, but not limited to, cash,
negotiable instruments and other instruments for the payment of money, chattel
paper, security agreements and other documents.


 


Commitment
means, as to each Lender, the amount set forth opposite such Lender’s name on Annex A
hereto (or, from and after the date hereof, the amount last set forth in the
Register, if different), representing such Lender’s obligation, upon and
subject to the terms and conditions of this Agreement, to make its
Proportionate Share of Loans and to acquire participations in Letters of
Credit.


 


Commitment
Percentage means, as to any Lender at the time of determination,
the result, expressed as a percentage, obtained by dividing such Lender’s
Commitment at such time by the Revolving Credit Facility at such time.


 


Consolidated
Subsidiaries means, as to the Borrower, each Subsidiary
listed as such on Schedule 6.1(b), and any additional
Subsidiary of the Borrower whose accounts are at the time in question, in
accordance with GAAP and pursuant to the written consent of the Administrative
Agent, which consent may be withheld in its absolute discretion or conditioned
upon, inter
alia, the execution and delivery of guaranties and security
documents, consolidated with those of the Borrower.


 


Contaminant
means any waste, pollutant, hazardous substance, toxic substance, hazardous
waste, special waste, petroleum or petroleum-derived substance or waste or any
constituent of any such substance or waste.


 


Controlled
Disbursement Account means each account maintained by and
in the name of the Borrower with a Disbursing Bank designated as such on Schedule
6.1(aa) or with Bank of America, for the purpose of disbursing
Revolving Credit Loan proceeds and other amounts deposited thereto pursuant to Sections
2.2(b)(i) and 8.1(b)(ii).


 


Cost
means, when applied to Inventory of the Borrower, the lower of (a) the
cost thereof computed in accordance with GAAP on a first-in first-out or FIFO
basis, and (b) the fair market value thereof.


 


Covenant EBITDA
means, as to any computation period, EBITDA for such period, plus Discontinued
Operations Expense to the extent deducted in calculating EBITDA.


 


7

















 


Covenant Fixed
Charge Coverage Ratio means, as to any computation
period, the ratio of (i) Covenant EBITDA for the computation period to (ii)
Fixed Charges for such period, determined as of the last day of such
computation period.


 


Current Assets
means, with respect to any Person, the aggregate amount of assets of such
Person which should properly be classified as current assets in accordance with
GAAP, after deducting adequate reserves in each case where a reserve is
appropriate in accordance with GAAP.


 


Current Liabilities
means, with respect to any Person, the aggregate amount of all Liabilities of
such Person which should properly be classified as current liabilities in
accordance with GAAP.


 


Debt
means


 


(a)           Indebtedness for money
borrowed,


 


(b)           Indebtedness, whether
or not for money borrowed,


 


(i)              represented
by notes payable, and drafts accepted, that represent extensions of credit,


 


(ii)             constituting
obligations evidenced by bonds, debentures, notes or similar instruments, or


 


(iii)            upon
which interest charges are customarily paid or that was issued or assumed as
full or partial payment for property,


 


(c)           Capitalized Lease
Obligations,


 


(d)           Indebtedness under
Interest Rate Protection Agreements, and


 


(e)           Guaranties of
obligations of the types enumerated in clauses
(a), (b), (c) and (d).


 


Default
means any of the events specified in Section 12.1 that, with the passage of time
or giving of notice or both, would constitute an Event of Default.


 


Default Margin
means 2.0%.


 


Deposit Account
has the meaning specified in the definition “Collateral.”


 


Dilution means,
for any computation period, the fraction, expressed as a percentage, the
numerator of which is the aggregate amount (expressed in Dollars) of all
charge-offs, deductions, returns, allowances or other reductions of any kind
made to Receivables of the Borrower during such period (excluding cash payments
made by Account Debtors on Receivables), and the denominator of which is the
aggregate amount (expressed in Dollars) of sales of the Borrower for such
period.


 


8

















 


Dilution Reserve means,
as of any date of determination, without duplication, such reserve as the
Administrative Agent may from time to time establish and revise from time to
time in the exercise of its reasonable credit judgment, applying standards
customary to institutional asset-based lenders, to reflect the Dilution as of
any such date with respect to Receivables of the Borrower for the immediately
preceding twelve-month period to the extent such Dilution exceeds ten percent
(10%).


 


Disbursing Bank
means any commercial bank with which a Controlled Disbursement Account is
maintained after the Effective Date.


 


Discontinued
Operations means the Rauch Sale and the closing of the
Borrower’s Rosemar manufacturing facility.


 


Discontinued
Operations Expense means the total sum expensed as a
result of or in connection with the Discontinued Operations, whether or not
characterized as such for the purposes of GAAP, including, without limitation,
cash payments to Rauch under the Rauch Sale Agreement and severance expenses in
connection with the closing of the Rosemar facility.


 


Dollar
and “$” means freely transferable United States dollars.


 


EBITDA
for a specified period means consolidated Net Income of the Borrower and its
Consolidated Subsidiaries for such period, before provision for interest
expense, income taxes, depreciation expense, amortization, and any
extraordinary item(s), all determined in accordance with GAAP,  minus any non-cash income items, including, without limitation, any
such items resulting from the retirement of Indebtedness at a discount, to the
extent included in computing EBITDA, and plus any non-cash charges to the extent
deducted in computing EBITDA, including the non-cash portion of Discontinued
Operations Expense, if any.


 


ERISA
means the Employee Retirement Income Security Act of 1974, as in effect from
time to time, and any successor statute.


 


ERISA Event
means a “Reportable Event” as defined in Section 4043(c) of ERISA, but
excluding any such event as to which the provision for 30 days’ notice to the
PBGC is waived under applicable regulations, (b) the filing of a notice of
intent to terminate a Benefit Plan subject to Title IV of ERISA or the
treatment of an amendment to such a Benefit Plan as a termination under Section
4041 of ERISA, (c) the institution of proceedings by the PBGC to terminate a
Benefit Plan subject to Title IV of ERISA or the appointment of a trustee
to administer any such Benefit Plan or an event or condition that might
reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Benefit Plan subject to Section 4042, (d) the imposition of any
liability under Title IV of ERISA other than for PBGC premiums due but not
yet payable, (e) the filing of an application for a minimum funding waiver
under Section 412 of the Code, (f) a withdrawal by a Borrower or any
Related Employer from a Benefit Plan subject to Section 4063 of ERISA
during a plan year in which it was a “substantial employer” as defined in
Section 4001(a)(2) of ERISA), (g) a Benefit Plan intending to qualify
under Section 401(a) of the Code losing such qualified status,
(h) the failure to make a required contribution to a Benefit Plan,
(i) a Borrower or any Related Company being in “default” (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer
Plan because of its complete or partial withdrawal (as


 


9

















 


described in
Section 4023 or 4205 of ERISA) from such Multiemployer Plan, or
(j) the occurrence of a non-exempt prohibited transaction within the
meaning of Section 4975 of the Code or Section 406 of ERISA with
respect to any Benefit Plan.


 


Effective Date
means the first date on which all of the conditions set forth in Section 5.1
shall have been fulfilled by the Borrower or waived by the Administrative Agent
and the Lenders in accordance with the provisions of Section 15.10.


 


Effective Interest
Rate means the rate of interest per annum on the Loans in
effect from time to time pursuant to the provisions of Section 4.1(a), (b),
(c),
and (d).


 


Eligible Assignee
means (i) a commercial bank, commercial finance company or other asset
based Lender, having total assets in excess of $10,000,000,000; (ii) any Lender
listed on the signature page of this Agreement; provided in each case that
the representation contained in Section 13.2 shall be applicable with
respect to such institution or Lender; (iii) any Affiliate of any Lender; and
(iv) during the existence of an Event of Default, any Person reasonably
acceptable to the Administrative Agent.


 


Eligible Inventory
means items of Inventory of the Borrower held for sale in the ordinary course
of the business of the Borrower (but not including packaging or shipping
materials or maintenance supplies) and which meet all of the following
requirements:


 


(a)           such Inventory is owned
by the Borrower, is subject to the Security Interest which is perfected as to
such Inventory, and is subject to no other Lien whatsoever other than a
Permitted Lien;


 


(b)           such Inventory consists
of raw materials or finished goods and does not consist of work-in-process,
supplies or consigned goods;


 


(c)           such Inventory is in
good condition and meets all standards applicable to such goods, their use or
sale imposed by any Governmental Authority having regulatory authority over
such matters;


 


(d)           such Inventory is
currently either usable or saleable, at prices approximating at least the cost
thereof, in the normal course of the Borrower’s business;


 


(e)           such Inventory is not
obsolete (as determined in accordance with the Borrower’s historical
classification practice consistently applied) or returned (other than in
accordance with the Borrower’s policies regarding returns of unsold
merchandise) or repossessed or used goods taken in trade;


 


(f)            such Inventory is
located within the United States at one of the locations listed in Schedule
6.1(v) or is in transit to one of such locations or to a United States port and
the Administrative Agent has received evidence satisfactory to it that such
Inventory in transit is insured for the benefit of the Administrative Agent and
the Lenders, as their interests may appear;


 


(g)           such Inventory is in
the possession and control of the Borrower and not any third party and if
located in a warehouse or other facility leased by the Borrower, the lessor


 


10

















 


has delivered
to the Administrative Agent a waiver and consent in form and substance
satisfactory to the Administrative Agent;


 


(h)           such Inventory is not
subject to a licensing or other agreement that would restrict in any way the
ability of the Administrative Agent or the Lenders to dispose of it at its full
appraised value; and


 


(i)            such Inventory is not
deemed to be ineligible by the Administrative Agent in its reasonable credit
judgment, applying standards customary to institutional asset-based lenders.


 


Eligible Receivable
means the unpaid portion of a Receivable payable in Dollars to the Borrower net
of any returns, discounts, credits or other allowances and deductions agreed to
by the Borrower and net of any amounts owed by the Borrower to the Account
Debtor on such Receivable, and which meets all of the following requirements:


 


(a)           such Receivable is
owned by the Borrower and represents a complete bona fide transaction which
requires no further act under any circumstances on the part of the Borrower to
make such Receivable payable by the Account Debtor;


 


(b)           such Receivable is not
unpaid more than 180 days after the date of the original invoice or past due
more than 60 days after its due date;


 


(c)           such Receivable does
not arise out of any transaction with any Subsidiary or Affiliate of the
Borrower, out of any transaction in which the performance of the Borrower has
been bonded, or out of a sale not made in the ordinary course of the Borrower’s
business;


 


(d)           such Receivable is not
owing by an Account Debtor or group of related Account Debtors more than 50% of
whose then-existing accounts owing to the Borrower do not meet the requirements
set forth in clause (b) above;


 


(e)           if the Account Debtor
with respect thereto is located outside of the United States of America
(including for purposes of this definition, Puerto Rico) or Canada, the goods
which gave rise to such Receivable were shipped after receipt by the Borrower
from the Account Debtor of an irrevocable letter of credit that has been
confirmed by a financial institution acceptable to the Administrative Agent and
is in form and substance acceptable to the Administrative Agent, payable in the
full face amount of the face value of the Receivable in Dollars at a place of
payment located within the United States and has been duly assigned to the
Administrative Agent;


 


(f)            the Borrower is not in
breach of any express or implied representation or warranty with respect to the
goods the sale of which gave rise to such Receivable;


 


(g)           the Account Debtor with
respect to such Receivable is not located in a state which imposes conditions
on the enforceability of Receivables with which the Borrower has not complied
nor is such Account Debtor insolvent or the subject of any bankruptcy or
insolvency proceedings of any kind or of any other proceeding or action,
threatened or pending, which might, in the Administrative Agent’s sole
judgment, have a materially adverse effect on such Account Debtor;


 


11

















 


(h)           the goods the sale of which
gave rise to such Receivable have been shipped or delivered to the Account
Debtor on an absolute sale basis and not on a bill and hold sale basis, a
consignment sale basis, a guaranteed sale basis, a sale or return basis or on
the basis of any other similar understanding, and such goods have not been
returned or rejected;


 


(i)            such Receivable is not
owing by (i) an Account Debtor or group of related Account Debtors (other than
Wal-Mart Stores, Inc. and related Account Debtors) whose then-existing accounts
owing to the Borrower exceed in face amount 20% of the Borrower’s total
Eligible Receivables or (ii) by Wal-Mart Stores, Inc. and related Account
Debtors whose then-existing accounts owing to the Borrower exceed in face
amount 25% of the Borrowers’ total Eligible Receivables;


 


(j)            such Receivable is
evidenced by an invoice or other documentation in form acceptable to the
Administrative Agent containing only terms normally offered by the Borrower,
dated no later than the date of shipment, and does not represent a progress or
installment billing;


 


(k)           such Receivable is a
valid, legally enforceable obligation of the Account Debtor with respect
thereto and is not subject to any present, or contingent (and no facts exist
which are the basis for any future), offset, deduction or counterclaim,
deposit, dispute or other defense on the part of such Account Debtor;


 


(l)            such Receivable is not
evidenced by chattel paper or an instrument of any kind;


 


(m)          such Receivable does not
arise from the performance of services, including services under or related to
any warranty obligation of the Borrower or out of service charges by the
Borrower or other fees for the time value of money;


 


(n)           such Receivable is not
owing by the United States government or any other governmental entity subject
to the Assignment of Claims Act of 1940, as amended, or similar state
legislation, unless such Receivable or the amount due thereunder have been
assigned to the Administrative Agent in compliance with the requirements
thereof;


 


(o)           such Receivable is
subject to the Security Interest which is perfected as to such Receivable, and
is subject to no other Lien whatsoever other than a Permitted Lien, and the
goods giving rise to such Receivable were not, at the time of the sale thereof,
subject to any Lien other than a Permitted Lien; and


 


(p)           such Receivable is not
deemed to be ineligible by the Administrative Agent in its reasonable credit
judgment, applying standards customary to institutional asset-based lenders.


 


Environmental Laws
means all applicable federal, state, local and foreign laws now or hereafter in
effect relating to pollution or protection of the environment, including
applicable laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes into the environment (including, without
limitation, ambient air, surface water, ground water or land) or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal,


 


12

















 


removal, transport
or handling of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes, and any and all applicable regulations, notices
or demand letters issued, entered, promulgated or approved thereunder; such
laws and regulations include but are not limited to the Resource Conservation
and Recovery Act, 42 U.S.C. § 6901 et  seq., as amended; the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
§ 9601 et  seq., as amended; the Toxic Substances Control
Act, 15 U.S.C. § 2601 et  seq., as amended; the Clean Air
Act, 42 U.S.C. § 7401 et  seq., as amended; and state and
federal lien and environmental cleanup programs.


 


Environmental Lien
means a Lien in favor of any governmental entity for (a) any liability under
Environmental Laws or (b) damages arising from, or costs incurred by such
governmental entity in response to, a Release or threatened Release of a
Contaminant into the environment.


 


Equipment
means and includes, as to any Person, all of such Person’s then owned or
existing and future acquired or arising, machinery, apparatus, equipment, motor
vehicles, tractors, trailers, rolling stock, fittings, fixtures and other tangible
personal property (other than Inventory) of every kind and description used in
such Person’s business operations or owned by such Person or in which such
Person has an interest and all parts, accessories and special tools and all
increases and accessions thereto and substitutions and replacements therefor.


 


Event of Default
means any of the events specified in Section 12.1.


 


Existing Credit
Agreement means the Amended and Restated Loan and
Security Agreement dated as of April 16, 1997 among Syratech, certain of its
Subsidiaries, and Bank of America, as amended and in effect from time to time.


 


Existing Default means the Event
of Default under the Existing Credit Agreement resulting from the Borrowers’
failure to comply with the requirements of Section 11.1(a) of the Existing
Credit Agreement as of December 31, 2003.


 


Federal Funds
Effective Rate means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of
the Federal Reserve system arranged by federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average rate charged to
Bank of America on such transactions as determined by the Administrative Agent.


 


Field Exam means an on-site
examination by the Administrative Agent of the Borrower and any of its
Subsidiaries and their respective operations, books, records, accounting
methods, procedures and controls, the Collateral and other property.


 


Financed Capital
Expenditures means Capital Expenditures funded with the
proceeds of Permitted Purchase Money Debt (excluding Loans) and those
represented by Capitalized Lease Obligations.


 


Financing
Statements means the Uniform Commercial Code financing
statements executed and delivered by the Borrower to the Administrative Agent,
naming the


 


13

















 


Administrative
Agent as secured party and one or more Borrower as debtor(s), in connection
with this Agreement.


 


Fiscal Month
means each consecutive period of four or five weeks, the first of which begins
on January 1 of each calendar year, ending on the Friday nearest the last day
of a calendar month, except that
the Fiscal Months that would otherwise end on the Fridays nearest the last days
of March, June, September and December shall end on the last days of such
months.


 


Fiscal Quarter
means each of the four consecutive periods of three Fiscal Months each,
beginning on the first day of a Fiscal Year.


 


Fiscal Year
means the calendar year and when preceded or followed by the designation of a
calendar year (e.g., 2004 Fiscal Year or Fiscal Year 2004) means such
designated calendar year.


 


Fixed Charges
means, as to any computation period, the sum of Cash Interest Expense, plus
principal payments on Debt, plus Capital Expenditures (other than Financed
Capital Expenditures), plus tax payments, in each case paid or due during such
computation period.


 


GAAP
means generally accepted accounting principles consistently applied and
maintained throughout the period indicated and consistent with the prior
financial practices of the Person in connection with which the term is used.


 


Governmental
Approvals means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
applicable governmental bodies, whether federal, state, local, foreign national
or provincial, and all agencies thereof.


 


Governmental
Authority means any applicable government or political
subdivision or any agency, authority, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand jury or
arbitrator, in each case whether foreign or domestic.


 


Guaranty,
Guaranteed or to Guarantee, as applied
to any obligation of another Person shall mean and include, without
duplication:


 


(a)           a guaranty (other than
by endorsement of negotiable instruments for collection in the ordinary course
of business), directly or indirectly, in any manner, of any part or all of such
obligation of such other Person, and


 


(b)           an agreement, direct or
indirect, contingent or otherwise, and whether or not constituting a guaranty,
the practical effect of which is to assure the payment or performance (or
payment of damages in the event of nonperformance) of any part or all of such
obligation of such other Person whether by


 


(i)            the
purchase of securities or obligations,


 


(ii)           the
purchase, sale or lease (as lessee or lessor) of property or the purchase or
sale of services primarily for the purpose of enabling the obligor with respect
to such


 


14

















 


obligation to make any payment or performance (or payment of damages in
the event of nonperformance) of or on account of any part or all of such
obligation or to assure the owner of such obligation against loss,


 


(iii)          the
supplying of funds to, or in any other manner investing in, the obligor with
respect to such obligation,


 


(iv)          repayment
of amounts drawn down by beneficiaries of letters of credit, or


 


(v)           the
supplying of funds to or investing in a Person on account of all or any part of
such Person’s obligation under a Guaranty of any obligation or indemnifying or
holding harmless, in any way, such Person against any part or all of such
obligation.


 


Indebtedness
of any Person means, without duplication, all Liabilities of such Person, and
to the extent not otherwise included in Liabilities, the following:


 


(a)           all obligations for
money borrowed or for the deferred purchase price of property or services,


 


(b)           all obligations
(including, during the noncancellable term of any lease in the nature of a
title retention agreement, all future payment obligations under such lease
discounted to their present value in accordance with GAAP) secured by any Lien
to which any property or asset owned or held by such Person is subject, whether
or not the obligation secured thereby shall have been assumed by such Person,


 


(c)           all obligations of
other Persons which such Person has Guaranteed, including, but not limited to,
all obligations of such Person consisting of recourse liability with respect to
accounts receivable sold or otherwise disposed of by such Person,


 


(d)           all obligations of such
Person in respect of Interest Rate Protection Agreements, and


 


(e)           in the case of the
Borrower (without duplication) all obligations in respect of the Loans.


 


Interest Payment
Date means the first day of each calendar month
commencing on May 1, 2004 and continuing thereafter until the Secured
Obligations have been irrevocably paid in full.


 


Interest Period
means, with respect to each LIBOR Rate Loan, the period commencing on the date
of the making or continuation of or conversion to such LIBOR Rate Loan and
ending one, two, three or six months thereafter, as the Borrower may elect in
the applicable Notice of Borrowing or Notice of Conversion or Continuation; provided,
that:


 


(i)            any
Interest Period that would otherwise end on a day that is not a Business Day
shall, subject to the provisions of clause
(iii) below, be extended to the next succeeding Business Day, unless
such Business Day falls in the next calendar month, in which case such Interest
Period shall end on the immediately preceding Business Day;


 


15

















 


(ii)           any
Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the last calendar
month included in such Interest Period) shall, subject to clause (iii) below, end on the last
Business Day of a calendar month;


 


(iii)          any
Interest Period that would otherwise end after the Termination Date shall end
on the Termination Date; and


 


(iv)          notwithstanding
clause (iii) above, no Interest
Period shall have a duration of less than one month and if any applicable
Interest Period would be for a shorter period, such Interest Period shall not
be available hereunder.


 


Interest Rate
Protection Agreement means an interest rate swap, cap or
collar agreement or similar arrangement between the Borrower and a Lender or
any Affiliate of a Lender, acceptable to the Administrative Agent in its
reasonable credit judgment, providing for the transfer or mitigation of
interest rate risks either generally or under specific contingencies.


 


Interest Rate
Protection Reserve means, at any time, the aggregate of
the obligations of the Borrower under all Interest Rate Protection Agreements
to which the Borrower is a party in the event of a termination thereof, on an
estimated “marked-to-market” basis.


 


Inventory
has the meaning specified in the definition “Collateral.”


 


Inventory Base
means, at any time, an amount equal to 80% (or such lesser percentage as the
Administrative Agent may in its reasonable credit judgment, applying standards
customary to institutional asset-based lenders, determine from time to time
following any adverse change in quality, composition, salability or other
measure of value of the Inventory) of the orderly liquidation value (net of
liquidation expenses) of Inventory at such time, as determined by the
Administrative Agent from time to time in its reasonable discretion.


 


Inventory Letter of
Credit means a Letter of Credit issued for the purpose of
purchasing Inventory of the account party thereon and any Bankers Acceptance
created on presentation of a draft against such a Letter of Credit.


 


Inventory Limit
means $30,000,000 or such lesser amount as the Administrative Agent may in its
reasonable credit judgment, applying standards customary to institutional
asset-based lenders, determine from time to time, actions resulting in the
curtailment or cessation of a business or product line or other changes in the
amount, nature or mix of inventory.


 


Investment
means, with respect to any Person:


 


(a)           any share of capital
stock, evidence of Indebtedness or other security issued by any other Person,


 


(b)           any loan, advance or
extension of credit to, or contribution to the capital of, any other Person,
excluding advances to employees in the ordinary course of business for business
expenses,


 


(c)           any Guaranty of the
obligations of any other Person,


 


16

















 


(d)           any other investment
(other than the Acquisition of a Business Unit) in any other Person, and


 


(e)           any commitment or
option to make an investment listed at (a)
through (d) above, provided that in the case of an option, the
consideration for such option is greater than $100,000.


 


IRS
means the Internal Revenue Service.


 


Lee
means Thomas H. Lee Company, a sole proprietorship.


 


Lee Affiliates
means Lee, Thomas H. Lee Equity Fund III, L.P., Thomas H. Lee Foreign Fund III,
L.P., THC Co-Investors III-A, LLC, THL Co—Investors III-B, LLC and any individual
who is, at the date of determination, an employee of Lee.


 


Lender
means at any time any financial institution party to this agreement at such
time, including any such Person becoming a party hereto pursuant to the
provisions of Article 13, and Lenders means at any time all of the financial
institutions party to this Agreement at such time, including any such Persons
becoming parties hereto pursuant to the provisions of Article 13.


 


Letter of Credit
means any letter of credit issued (a) for the account of the Borrower and
outstanding on the Effective Date pursuant to a Reimbursement Agreement
satisfactory to the Administrative Agent or (b) by Bank of America pursuant to
the Master L/C Agreement or Article 3.


 


Letter of Credit
Amount means, with respect to any Letter of Credit, the
aggregate maximum amount at any time available for drawing under such Letter of
Credit.


 


Letter of Credit
Availability means, as of the date of determination, the
aggregate face amount of additional Letter of Credit Obligations that would be
permitted to be outstanding hereunder at the time of determination in
accordance with Section 3.2, which shall be an amount equal to the lesser of
(i) the Letter of Credit Facility minus the Letter of Credit Obligations and
(ii) Revolving Credit Availability, on such date.


 


Letter of Credit
Documents means the Master L/C Agreement and each of the
other documents, agreements and other writings required by Bank of America to
be executed and/or delivered in connection with the issuance of a Letter of
Credit, including, without limitation, any letter of credit application and
reimbursement agreement.


 


Letter of Credit
Facility means a subfacility of the Revolving Credit
Facility providing for the issuance of Letters of Credit described in Article 3
and creation of Bankers Acceptances up to an aggregate amount of Letter of
Credit Obligations at any one time outstanding not to exceed $30,000,000.


 


Letter of Credit
Obligations means, at any time, the sum of (a) the
Reimbursement Obligations of the Borrower at such time, plus (b) the aggregate Letter
of Credit Amount of Letters of Credit outstanding at such time, plus
(c) the aggregate Letter of Credit Amount of Letters of Credit the issuance of
which has been authorized by the Administrative


 


17

















 


Agent and Bank of
America pursuant to Section 3.4(b) but that have not yet
been issued, in each case as determined by the Administrative Agent.


 


Letter of Credit
Reserve means, at any time, an amount equal to the
aggregate Letter of Credit Obligations at such time, less the aggregate amount of
all Letter of Credit Obligations fully secured by Cash Collateral, provided,
that at the request of the Borrower, the Administrative Agent may, in its
discretion, maintain the Letter of Credit Reserve in the full amount of the
Letter of Credit Facility less the amount of any Letter of Credit
Obligations secured by Cash Collateral.


 


Liabilities
means all liabilities of a Person determined in accordance with GAAP and
includable on a balance sheet of such Person prepared in accordance with GAAP.


 


LIBOR Rate means, for any Interest
Period, with respect to LIBOR Rate Loans, the rate of interest per annum
determined pursuant to the following formula:


 




	
  LIBOR Rate =

  	
  Offshore Base Rate

  	
   

  
	
   

  	
  1.00 -
  Eurodollar Reserve Percentage

  	
   

  
				






 


Where,


 


Offshore Base Rate means the rate per
annum appearing on Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period. 
If for any reason such rate is not available, the Offshore Base Rate
shall be, for any Interest Period, the rate per annum appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in Dollars
at approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page,
the applicable rate shall be the arithmetic mean of all such rates.  If for any reason none of the foregoing
rates is available, the Offshore Base Rate shall be, for any Interest Period,
the rate per annum determined by the Administrative Agent as the rate of
interest at which dollar deposits in the approximate amount of the LIBOR Rate
Loan comprising part of such Borrowing would be offered by Bank of America’s
London Branch to major banks in the offshore dollar market at their request at
or about 11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period for a term comparable to such Interest Period.


 


Eurodollar Reserve Percentage means,
for any day during any Interest Period, the reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect on such
day applicable to member banks under regulations issued from time to time by
the Federal Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as “Eurocurrency
liabilities”).  The Offshore Rate for
each outstanding LIBOR Rate Loan shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.


 


18

















 


LIBOR Rate Loan means
any Revolving Credit Loan which bears interest determined with reference to the
LIBOR Rate.


 


Lien
as applied to the property of any Person means:


 


(a)           any mortgage, deed to
secure debt, deed of trust, lien, pledge, charge, lease constituting a
Capitalized Lease Obligation, conditional sale or other title retention
agreement, or other security interest, security title or encumbrance of any
kind in respect of any property of such Person or upon the income or profits
therefrom,


 


(b)           any arrangement,
express or implied, under which any property of such Person is transferred,
sequestered or otherwise identified for the purpose of subjecting the same to
the payment of Indebtedness or performance of any other obligation in priority
to the payment of the general, unsecured creditors of such Person,


 


(c)           any Indebtedness which
is unpaid more than 30 days after the same shall have become due and payable
and which if unpaid might by law (including, but not limited to, bankruptcy and
insolvency laws) or otherwise be given any priority whatsoever over general
unsecured creditors of such Person,


 


(d)           the filing of, or any
agreement to give, any financing statement under the UCC or its equivalent in
any jurisdiction, excluding informational or precautionary financing statements
relating to property leased by the Borrower, and


 


(e)           in the case of Real
Estate, reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances.


 


Loan
means any Revolving Credit Loan, whether a Base Rate Loan or a LIBOR Rate Loan,
as well as all such loans collectively.


 


Loan Account
and Loan Accounts have
the meanings specified in Section 5.5.


 


Loan Documents
means, collectively, this Agreement, the Notes, the Security Documents, the
Letter of Credit Documents, and each other instrument, agreement and document
executed and delivered by the Borrower or any Affiliate or Subsidiary of the
Borrower in connection with this Agreement or the Secured Obligations, and each
other instrument, agreement or document referred to herein or contemplated
hereby.


 


Lockbox
means the U. S. Post Office Box(es) specified in the Lockbox Agreement.


 


Lockbox Agreement
means the agreement between the Borrower and a Clearing Bank concerning the
establishment of a Lockbox for the collection of Receivables.


 


Master L/C Agreement
means the Master Agreement for Letters of Credit dated on or about September
15, 1995, made by the Borrower, certain Subsidiaries of the Borrower and
Syratech Hong Kong in favor of Bank of America and its Affiliates setting forth
certain terms and conditions of all Letters of Credit, provided that in the case of
any conflict between the


 


19

















 


terms of the
Master L/C Agreement and this Agreement, the provisions of this Agreement shall
control.


 


Materially Adverse
Effect means any act, omission, event or undertaking
which, singly or in the aggregate, would or could be expected, in the
reasonable credit judgment of the Required Lenders, to have a materially
adverse effect upon (a) the business, assets, properties, liabilities,
condition (financial or otherwise), or results of operations of the Borrower,
(b) upon the ability of the Borrower to perform any obligations under this
Agreement or any other Loan Document to which it is a party, or (c) the
legality, validity, binding effect, enforceability or admissibility into
evidence of any Loan Document or the ability of the Administrative Agent or any
Lender to enforce any material rights or remedies under or in connection with
any Loan Document; in any case, whether resulting from any single act,
omission, situation, status, event, or undertaking, together with other such
acts, omissions, situations, statuses, events, or undertakings and in each case
as determined by the Required Lenders in the exercise of its/their reasonable
credit judgment.


 


Merged Subsidiary  means each of the Subsidiaries of the
Borrower merged into the Borrower pursuant to the Mergers.


 


Mergers
means the mergers of the Merged Subsidiaries of Syratech with and into Syratech
Corporation, with Syratech as the survivor, as contemplated by the Merger
Agreements.


 


Merger Agreements
means the Agreements and Plans of Merger listed on Schedule 1 - Merger Documents attached hereto.


 


Multiemployer Plan
means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which
the Borrower or a Related Company is required to contribute or has contributed
within the immediately preceding six years.


 


Net Income
or Net Loss means, as
applied to any Person, the net income (or net loss) of such Person for the period
in question after giving effect to deduction of or provision for all operating
expenses, all taxes and reserves (including reserves for deferred taxes) and
all other proper deductions, all determined in accordance with GAAP, provided
that there shall be excluded:


 


(a)           the net income (or net
loss) of any Person accrued prior to the date it becomes a Subsidiary of, or is
merged into or consolidated with, the Person whose Net Income is being
determined or a Subsidiary of such Person,


 


(b)           the net income (or net
loss) of any Person in which the Person whose Net Income is being determined or
any Subsidiary of such Person has an ownership interest, except, in the case of
net income, to the extent that any such income has actually been received by
such Person or such Subsidiary in the form of cash dividends or similar
distributions,


 


(c)           any restoration of any
contingency reserve, except to the extent that provision for such reserve was
made out of income during such period,


 


20

















 


(d)           any net gains or losses
on the sale or other disposition, not in the ordinary course of business, of
Investments, Business Units and other capital assets, provided that there shall
also be excluded any related charges for taxes thereon,


 


(e)           any net gain arising
from the collection of the proceeds of any insurance policy,


 


(f)            any write-up of any
asset, and


 


(g)           any other extraordinary
item.


 


Net Outstandings
of any Lender means, at any time, the sum of (a) all amounts paid by such Lender
(other than pursuant to Section 14.7) to the Administrative Agent
in respect of Loans by such Lender under the Revolving Credit Facility, minus
(b) all amounts received by the Administrative Agent and paid by the
Administrative Agent to such Lender for application, pursuant to this
Agreement, to reduction of the outstanding principal balance of the Loans of
such Lender.


 


Net Worth
of any Person means the total shareholders’ equity or aggregate partnership
capital (including capital stock (including specifically any Preferred Stock),
parties’ capital, additional paid-in capital and retained earnings, after
deducting treasury stock) which would appear as such on a balance sheet of such
Person prepared in accordance with GAAP.


 


Non-Ratable Loan
means a Base Rate Loan made by Bank of America in accordance with the
provisions of Section 4.8(b).


 


Note
means one of the Revolving Credit Notes, and Notes means more than one of such
instruments.


 


Notice of Borrowing
means a written notice, or telephonic notice followed by a confirming same-day
written notice, requesting a Borrowing of either a Base Rate Loan or a LIBOR
Rate Loan, which is given by telex or facsimile transmission in accordance with
the applicable provisions of Section 2.2 and which specifies (i) the
amount of the requested Borrowing, (ii) the date of the requested Borrowing,
and (iii) if the requested Borrowing is of a LIBOR Rate Loan, the duration of
the applicable Interest Period.


 


Notice of Conversion or Continuation
has the meaning specified in Section 4.12.


 


Operating Lease
means any lease (other than a lease constituting a Capitalized Lease
Obligation) of real or personal property.


 


Overadvance Loans shall have the
meaning set forth in Section 4.7(d).


 


PBGC
means the Pension Benefit Guaranty Corporation and any successor agency.


 


Pending Loan
has the meaning specified in Section 4.15(b).


 


21

















 


Permitted
Guaranties means Guaranties arising out of the
endorsement of negotiable instruments for deposit or collection, the issuance
of Letters of Credit for the account of Syratech Hong Kong pursuant to the
terms of the Master L/C Agreement, the Rauch Guaranty and similar transactions
in the ordinary course of business.


 


Permitted
Investments means:


 


(a)           Investments of the
Borrower in:


 


(i)            negotiable
certificates of deposit, time deposits and banker’s acceptances issued by a
Lender or any Affiliate of a Lender or by any United States bank or trust
company having capital, surplus and undivided profits in excess of
$250,000,000,


 


(ii)           any
direct obligation of the United States of America or any agency or
instrumentality thereof which has a remaining maturity at the time of purchase
of not more than one year and repurchase agreements relating to the same,


 


(iii)          sales
on credit in the ordinary course of business on terms customary in the
industry,


 


(iv)          notes,
accepted in the ordinary course of business, evidencing overdue accounts
receivable arising in the ordinary course of business,


 


(v)           its
Subsidiaries as existing on the Agreement Date (as the same may increase as a
result of such Subsidiaries’ profitable operations), and


 


(vi)          Investments
approved by the Administrative Agent; and


 


(b)           other Investments of
the Borrower approved by the Administrative Agent that are held in or in
connection with the Cash Collateral Account.


 


Permitted Liens
means:


 


(a)           Liens securing taxes,
assessments and other governmental charges or levies (excluding any Lien
imposed pursuant to any of the provisions of ERISA) or the claims of
materialmen, mechanics, carriers, warehousemen or landlords for labor,
materials, supplies or rentals incurred in the ordinary course of business, but
(i) in all cases, only if payment shall not at the time be required to be
made in accordance with Section 9.7,
and (ii) in the case of warehousemen or landlords controlling locations
where Inventory is located, only if such liens have been waived or subordinated
to the Security Interest in a manner satisfactory to the Administrative Agent;


 


(b)           Liens consisting of
deposits or pledges made in the ordinary course of business in connection with,
or to secure payment of, obligations under workers’ compensation, unemployment
insurance or similar legislation;


 


(c)           Liens constituting
encumbrances in the nature of zoning restrictions, easements and rights or
restrictions of record on the use of the Real Estate, which in the


 


22

















 


judgment of
the Administrative Agent do not materially detract from the value of such Real Estate
or impair the use thereof in the business of the Borrower;


 


(d)           Purchase Money Liens
securing Permitted Purchase Money Debt;


 


(e)           Liens of the
Administrative Agent and any Lender arising under this Agreement and the other
Loan Documents; and


 


(f)            Liens arising out of
or resulting from any judgment or award, the time for the appeal or petition
for rehearing of which shall not have expired, or in respect of which the
Borrower is fully protected by insurance or in respect of which the Borrower
shall at any time in good faith be prosecuting an appeal or proceeding for a
review and in respect of which a stay of execution pending such appeal or
proceeding for review shall have been secured, and as to which appropriate
reserves have been established on the books of the appropriate Borrower(s).


 


Permitted Purchase
Money Debt means Purchase Money Debt of the Borrower
incurred after the Agreement Date, as to which each of the following is true:


 


(a)           such Debt is secured by
a Lien at all times confined solely to the tangible asset (other than
Inventory) the purchase price of which was financed through the incurrence of
such Purchase Money Debt;


 


(b)           the aggregate principal
amount of such Debt does not exceed the lesser of


 


(i)            the
cost (including the principal amount of such Debt, whether or not assumed) of
the tangible asset (other than Inventory) subject to such Lien, and


 


(ii)           the
fair value of such tangible asset (other than Inventory) at the time of its
acquisition (except that for new
property for which there is an established market, fair value shall equal
cost);


 


(c)           such Debt is incurred
to acquire property within the limits imposed pursuant to the provisions of Section 11.5; and


 


(d)           such Debt, when
aggregated with the principal amount of all such Debt and Capitalized Lease
Obligations of the Borrower, does not exceed $5,000,000.


 


Person
means an individual, corporation, limited liability company, partnership,
association, trust or unincorporated organization or a government or any agency
or political subdivision thereof.


 


Plan EBITDA
means Covenant EBITDA for any computation period as set forth in the
Projections.


 


Preferred Stock
means up to 25,000 shares of Cumulative Redeemable Preferred Stock issued by
Syratech in connection with the consummation of the Recapitalization.


 


Pricing EBITDA
means EBITDA, minus any cash Discontinued Operations Expense not deducted in
computing EBITDA.


 


23

















 


Pricing Fixed
Charge Coverage Ratio means, as to any computation
period, the ratio of (i) Pricing EBITDA for the computation period to
(ii) Fixed Charges for such period, determined as of the last day of such
computation period.


 


Principal Officers
means Gregory W. Hunt and Robert Meers, so long as they are officers of Syratech.


 


Projections
means the forecasted consolidated (a) balance sheets, (b) statements of
operations and (c) cash flow statements of Syratech and the Consolidated
Subsidiaries for two-year period beginning January 1, 2004, prepared on a
monthly basis as to the first year of such period and thereafter on an annual
basis, together with appropriate supporting details and a statement of
underlying assumptions.


 


Proportionate Share
or Ratable Share or Ratable means, as to
any Lender, such Lender’s share of an amount in Dollars or other property at
the time of determination equal to (i) the Commitment Percentage of such
Lender, or (ii) if the Commitments are terminated, the result, expressed as a
percentage, obtained by dividing the principal amount of the Loans then owing
to such Lender by the total principal amount of all Loans then owing to all
Lenders, or (iii) if no Loans are outstanding, the result, expressed as a
percentage, obtained by dividing such Lender’s participation in the outstanding
Letter of Credit Obligations by the total Letter of Credit Obligations then
outstanding.


 


Proprietary Rights
means and includes, as to the Borrower, all of the Borrower’s now owned and
hereafter arising or acquired:  patents,
patent rights, copyrights, works which are the subject matter of copyrights,
trademarks, service marks, trade names, trade styles, patent, trademark and
service mark applications, and all licenses and rights related to any of the
foregoing, all extensions, renewals, reissues, divisions, continuations and
continuations-in-part of any of the foregoing and all rights to sue for past,
present and future infringement of any of the foregoing.


 


Purchase Money Debt
means


 


(a)           Debt created to finance
the payment of all or any part of the purchase price of any tangible asset
(other than Inventory),


 


(b)           any Debt incurred at
the time of or within 10 days prior to or after the acquisition of any tangible
asset (other than Inventory) for the purpose of financing all or any part of
the purchase price thereof, and


 


(c)           any renewals,
extensions or refinancings of the foregoing, but not any increases in the
principal amounts thereof outstanding at the time.


 


Purchase Money Lien
means any Lien securing Purchase Money Debt, but only if such Lien shall at all
times be confined solely to the tangible asset (other than Inventory) the
purchase price of which was financed through the incurrence of the Purchase
Money Debt secured by such Lien.


 


Rauch
means Rauch Industries, Inc., a North Carolina corporation and a wholly owned
Subsidiary of Syratech.


 


24

















 


Rauch Guaranty
means the Rauch Guaranty, dated as of March 5, 2004, by Rauch in favor of the
Administrative Agent.


 


Rauch Sale  means the liquidation of the assets and
sale of the stock of Rauch pursuant to the Rauch Sale Agreement.


 


Rauch Sale
Agreement means a Stock Purchase Agreement among the
purchaser, Rauch and the Borrower continuing terms and conditions reasonably
satisfactory to the Administrative Agent.


 


Rauch Security
Agreement means the Rauch Security Agreement, dated as of
March 5, 2004, between Rauch and the Administrative Agent.


 


Real Estate
means all of the Borrower’s or its Subsidiaries’ now owned or hereafter
acquired estates in real property, including, without limitation, all fees,
leaseholds, future interests and easements, together with all of the Borrower’s
or such Subsidiaries’ now owned or hereafter acquired interests in the
improvements and emblements thereon, the fixtures attached thereto and the
easements appurtenant thereto.


 


Receivables
has the meaning specified in the definition “Collateral.”


 


Register
has the meaning specified in Section 13.1(d).


 


Reimbursement
Agreement means, with respect to a Letter of Credit or
Bankers Acceptance outstanding on the Effective Date, the agreement or other
document pursuant to which the account party under such Letter of Credit is
obligated to reimburse the issuer thereof for any amounts drawn thereunder
(including such amounts as are evidenced from time to time by outstanding
Bankers Acceptances), and with respect to any Letter of Credit issued on or
after the Effective Date, such form of application therefor and form of
reimbursement agreement therefor (whether in a single document or several
documents) as Bank of America may employ in the ordinary course of business for
its own account, with such modifications thereto as may be agreed upon by Bank
of America and the Borrower, provided that such application and
agreement and any modifications thereto are not inconsistent with the terms of
this Agreement.


 


Reimbursement
Obligations means the reimbursement or repayment
obligations of the Borrower to Bank of America pursuant to Section 3.6 or pursuant to a
Reimbursement Agreement with respect to amounts that have been drawn under
Letters of Credit (including such amounts as are evidenced from time to time by
outstanding Bankers Acceptances).


 


Related Company
means any (i) corporation or limited liability company which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Code) as the Borrower; (ii) partnership, limited liability company or other
trade or business (whether or not incorporated) under common control (within
the meaning of Section 414(c) of the Code) with the Borrower; (iii) member of
the same affiliated service group (within the meaning of Section 414(m) of the
Code) as the Borrower, any entity described in clause (i) above or any
entity described in clause (ii) above, or (iv) any other entity
required to be aggregated with the Borrower pursuant to Section 414(o) of the
Code.


 


25

















 


Release
means release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or outdoor
environment or into or out of any Real Estate, including the movement of
Contaminants through or in the air, soil, surface water or groundwater.


 


Remedial Action
means actions required to (i) clean up, remove, treat or in any other way address
Contaminants in the indoor or outdoor environment; (ii) prevent the Release or
threat of Release or minimize the further Release of Contaminants so they do
not migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; or (iii) perform pre-remedial studies and
investigations and post-remedial monitoring and care.


 


Required Lenders
means, at any time, any combination of Lenders whose Commitment Percentages at
such time aggregate at least 66-2/3%; provided,
however, that Required Lenders shall mean any combination of Lenders
whose Commitment Percentages at such time aggregate at least 50% for the
purposes of (i) exercising the right to decline to fund their Ratable Share of
Loans during the existence of an Event of Default as provided in Section 4.7(c), (ii) declaring an Event of
Default under Section 12.1(d), and
(iii) requesting the Administrative Agent to exercise remedies pursuant to Section 12.2(b).


 


Reserves
means at any time the sum of the Usage Reserves, the Dilution Reserve, the Bank
Product Reserve and such other reserves against the Borrowing Base as the
Administrative Agent may determine from time to time, in the exercise of its
reasonable credit judgment, applying standards customary to institutional
asset-based lenders, to be an appropriate response to an adverse change
affecting the value of the Collateral.


 


Restricted
Distribution by any Person means (a) the retirement,
redemption, purchase, or other acquisition for value of any capital stock or other
equity securities or partnership interests issued by such Person, (b) the
declaration or payment of any dividend or distribution on or with respect to
any such securities or partnership interests, (c) any loan or advance by such
Person to, or other investment by such Person in, the holder of any of such
securities or partnership interests, and (d) any other payment (other than
salaries of employees or advances made in the ordinary course of business to
employees for travel and other expenses incurred in the ordinary course of
business) by such Person with respect to such securities or partnership
interests.


 


Restricted Payment
means (a) any redemption, repurchase or prepayment or other retirement,
prior to the stated maturity thereof or prior to the due date of any regularly
scheduled installment or amortization payment with respect thereto, of any
Debt, Subordinated Debt or other Indebtedness that is junior and subordinate to
the Loans, (b) the payment by any Person of the principal amount of or interest
on any Indebtedness (other than trade debt) owing to an Affiliate of such
Person or to any Affiliate of any such Affiliate, and (c) the payment of any
management, consulting or similar fee by any Person to any Affiliate of such
Person.


 


Revolving Credit Availability
means, as of the date of determination, the aggregate principal amount of
Revolving Credit Loans available to be borrowed by the Borrower hereunder at
the time in accordance with Section 2.1, which shall be an amount equal
to the excess, if any, of (a) the lesser of (i) the Revolving Credit Facility minus
the Reserves and (ii)


 


26

















 


the Borrowing Base
on such date, minus, in either
case (b) the aggregate principal amount of Revolving Credit Loans outstanding
on such date.


 


Revolving Credit
Facility means the principal sum of $70,000,000 as the
same may be reduced from time to time pursuant to the provisions of Section 2.5.


 


Revolving Credit
Loans means loans made to the Borrower pursuant to Section 2.1
and refers to a Base Rate Loan and a LIBOR Rate Loan (each a Type of Revolving
Credit Loan).


 


Revolving Credit
Note means each Revolving Credit Note made by the
Borrower payable to the order of a Lender evidencing the joint and several
obligations of the Borrower to pay the aggregate unpaid principal amount of all
Revolving Credit Loans made to it by such Lender (and any promissory note or
notes that may be issued from time to time in substitution, renewal, extension,
replacement or exchange therefor, whether payable to such Lender or a different
lender, whether issued in connection with a Person becoming a lender after the
Effective Date or otherwise), substantially in the form of Exhibit A hereto, with all
blanks properly completed, either as originally executed or as the same may
from time to time be supplemented, modified, amended, renewed, extended or
refinanced.


 


SEC
means the Securities and Exchange Commission (and any successor agency).


 


Schedule of
Inventory means a schedule delivered by the Borrower to
the Administrative Agent pursuant to the provisions of Section 8.14(b).


 


Schedule of
Receivables means a schedule delivered by the Borrower to
the Administrative Agent pursuant to the provisions of Section 8.14(a).


 


Secured Obligations
means, in each case whether now in existence or hereafter arising,


 


(a)           the principal of and
interest and premium, if any, on the Revolving Credit Loans,


 


(b)           reimbursement and other
obligations arising under Letter of Credit Documents or otherwise relating to
Letters of Credit,


 


(c)           obligations from time
to time under or with respect to Bank Products, and


 


(d)           all other indebtedness,
liabilities, obligations, overdrafts, covenants and duties of the Borrower, to
the Administrative Agent or any Lender or any of their respective Affiliates of
every kind, nature and description, direct or indirect, absolute or contingent,
due or not due, contractual or tortious, liquidated or unliquidated and whether
or not evidenced by any note and whether or not for the payment of money, under
or in respect of this Agreement, any Note, any Letter of Credit Documents, or
any of the other Loan Documents.


 


27

















 


Security Documents
means each of the following:


 


(a)           the Financing
Statements, and


 


(b)           each other writing
executed and delivered by any Person securing the Secured Obligations or
evidencing such security.


 


Security Interest
means the Liens of the Administrative Agent, for its benefit and the benefit of
the Lenders, on and in the Collateral effected hereby or by any of the Security
Documents or pursuant to the terms hereof or thereof.


 


Senior Note
Indenture means the Indenture dated as of April 16, 1997
between Syratech and State Street Bank and Trust Company, Trustee.


 


Senior Notes
means the outstanding Syratech 11% Senior Notes due 2007, issued pursuant to
the Senior Note Indenture.


 


Settlement Date
means each Business Day after the Effective Date selected by the Administrative
Agent in its sole discretion subject to and in accordance with the provisions
of Section
4.8(c)(i) as of which a Settlement Report is delivered by the
Administrative Agent and on which settlement is to be made among the Lenders in
accordance with the provisions of Section 4.8.


 


Settlement Report
means each report, substantially in the form attached hereto as Exhibit E,
prepared by the Administrative Agent and delivered to each Lender and setting
forth, among other things, as of the Settlement Date indicated thereon and as
of the next preceding Settlement Date, the aggregate principal balance of all
Revolving Credit Loans outstanding, each Lender’s Proportionate Share thereof,
each Lender’s Net Outstandings and all Non-Ratable Loans made, and all payments
of principal, interest and fees received, by the Administrative Agent from the
Borrower during the period beginning on such next preceding Settlement Date and
ending on such Settlement Date.


 


Solvent
means, as to any Person, that such Person has capital sufficient to carry on
its business and transactions in which it is about to engage and is able to pay
its Indebtedness as it matures and owns property having a value, both at fair
valuation and at present fair salable value, greater than the amount required
to pay its Indebtedness.


 


Subordinated Debt
means any Debt of the Borrower which is subordinated to the Secured Obligations
on terms and conditions acceptable to the Required Lenders.


 


Subsidiary
when used to determine the relationship of a Person to another Person, means a
Person of which an aggregate of 50% or more of the stock of any class or
classes or 50% or more of other ownership interests is owned of record or
beneficially by such other Person or by one or more Subsidiaries of such other
Person or by such other Person and one or more Subsidiaries of such Person, (a)
if the holders of such stock or other ownership interests (i) are
ordinarily, in the absence of contingencies, entitled to vote for the election
of a majority of the directors (or other individuals performing similar
functions) of such Person, even though the right so to vote has been suspended
by the happening of such a contingency, or (ii) are entitled, as such
holders, to vote for the election of a majority of the directors (or
individuals performing


 


28

















 


similar functions)
of such Person, whether or not the right so to vote exists by reason of the
happening of a contingency, or (b) in the case of such other ownership
interests, if such ownership interests constitute a majority voting interest.


 


Syratech
means Syratech Corporation, a Delaware corporation and the survivor of the
Mergers.


 


Syratech Hong Kong
means Syratech (H.K.) Limited, a corporation organized under the laws of Hong
Kong, the common stock of which is owned by Syratech.


 


Taxes
means, with respect to any Person, any and all present or future taxes,
including any change in the basis of taxation (except a change in the rate of
taxation on the overall net income of such Person, by the jurisdiction, or by
any political subdivision or taxing authority of any such jurisdiction, in
which such Person has its principal office), levies, imposts, duties, fees,
assessments, deductions, withholdings or other charges of whatever nature,
including, without limitation, income, gross receipts, excise, property, sales,
transfer, license, payroll, withholding, social security and franchise taxes
now or hereafter imposed or levied by the United States of America, or any
state, local or foreign government or by any department, agency or other
political subdivision or taxing authority thereof and all interest, penalties,
additions to tax or similar liabilities with respect thereto.


 


Termination Date
means the earlier of


 


(a)           March 31, 2006, and


 


(b)           the date on which all
Secured Obligations shall have been irrevocably paid in full and the Revolving
Credit Facility terminated.


 


Type
means a Base Rate Loan or a LIBOR Rate Loan.


 


Unfunded Vested
Accrued Benefits means at any time, with respect to any
Benefit Plan that is a pension plan within the meaning of Section 3(2) of
ERISA, the amount (if any) by which (a) the present value of all vested
nonforfeitable benefits under such Benefit Plan exceeds (b) the fair market
value of all such Benefit Plan assets allocable to such benefits, as determined
using such reasonable actuarial assumptions and methods as are specified in the
Schedule B (Actuarial Information) to the most recent Annual Report (Form 5500)
filed with respect to such Benefit Plan.


 


UCC
means the Uniform Commercial Code as in effect from time to time in the State
of Georgia.


 


Unused Fee
means 0.50% per annum; provided
that during any period that the Applicable Margin is determined under clause
(x) of the proviso in the definition thereof, the Unused Fee shall be 0.375%
per annum.


 


Unused Portion
means on any date the amount by which the Revolving Credit Facility in effect
on such date exceeds the sum of (i) the outstanding principal balance of all
Loans on such date, plus (ii) the Letter of Credit Reserve (or
lesser amount of Letter of Credit


 


29

















 


Obligations) on
such date if such date is the last day of a month and, if not, on the last day
of the month immediately preceding such date.


 


Usage Reserves
means, at any time, the sum of the Letter of Credit Reserve and the Interest
Rate Protection Reserve.


 


Section 1.2             Other Referential
Provisions.


 


(a)           All terms in this
Agreement, the Exhibits and Schedules hereto shall have the same defined
meanings when used in any other Loan Documents, unless the context shall require
otherwise.


 


(b)           Except as otherwise
expressly provided herein, all accounting terms not specifically defined or
specified herein shall have the meanings generally attributed to such terms
under GAAP including, without limitation, applicable statements and
interpretations issued by the Financial Accounting Standards Board and
bulletins, opinions, interpretations and statements issued by the American
Institute of Certified Public Accountants or its committees.


 


(c)           All personal pronouns
used in this Agreement, whether used in the masculine, feminine or neuter
gender, shall include all other genders; the singular shall include the plural,
and the plural shall include the singular.


 


(d)           The words “hereof”,
“herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provisions of this Agreement.


 


(e)           Titles of Articles and
Sections in this Agreement are for convenience only, do not constitute part of
this Agreement and neither limit nor amplify the provisions of this Agreement,
and all references in this Agreement to Articles, Sections, Subsections,
paragraphs, clauses, subclauses, Schedules or Exhibits shall refer to the
corresponding Article, Section, Subsection, paragraph, clause or subclause of
this Agreement, or to the corresponding Schedule or Exhibit attached to this
Agreement, unless specific reference is made to the articles, sections or other
subdivisions or schedules or exhibits of or to another document or instrument.


 


(f)            References to any
document or agreement (including this Agreement) shall include references to
such document or agreement as amended, novated, supplemented, modified or
replaced from time to time, so long as and to the extent that such amendment,
novation, supplement, modification or replacement is either not prohibited by
the terms of this Agreement or is consented to by the Required Lenders and the
Administrative Agent (or otherwise in accordance with the terms hereof).


 


(g)           Except where specifically
restricted, reference to a party to a Loan Document includes that party and its
successors and assigns permitted hereunder and under such Loan Document.


 


(h)           References to the time
of day are to the time of day in the city in which the Agent’s Office is
located.


 


30

















 


(i)            The terms “payment”,
“prepayment”, “distribution” and similar terms used in the definitions
“Restricted Distribution” and “Restricted Payment” and in Section 11.6, shall include payment by
means of the transfer of funds or of property and, in the event of a transfer
of property, the payment shall be deemed to be in an amount equal to the
greater of the fair market value and the book value of the property at the time
of the transfer.


 


(j)            Whenever from the
context it appears appropriate, the term “Loan”, including such term as used as
part of a defined term including the term “Loan”, shall mean and include a Loan
made by all Lenders to the Borrower as well as a Lender’s Proportionate Share
of any such Loan.


 


(k)           Each reference herein
to “reasonable attorneys’ fees” or “reasonable counsel fees” shall mean and
refer to the reasonable fees (and expenses) actually incurred by the party
retaining such attorneys or counsel, computed on the basis customarily employed
by such attorneys or counsel and not on the basis of a percentage of recovery
or percentage of claim or other similar basis. 
Each party hereto knowingly and intentionally waives any benefit of any
otherwise applicable statutory provision that would entitle it to recover
attorneys’ fees on such a percentage of basis.


 


(l)            Whenever the phrase
“to the knowledge of the Borrower,” or words of similar import relating to the
knowledge of the Borrower are used herein, such phrase shall mean and refer to
(i) the actual knowledge of the Principal Officers or (ii) the knowledge
that the Principal Officers would have obtained if they had engaged in good
faith in the diligent performance of their duties, including the making of such
reasonable specific inquiries as may be necessary of the appropriate persons in
a good faith attempt to ascertain the accuracy of the matter as to which such
phrase relates.


 


(m)          The terms accounts,
chattel paper, contract rights, documents, equipment, instruments, general
intangibles, inventory and proceeds, as and when used in this Agreement
(without being capitalized) or the Security Documents, shall have the meanings
given those terms in the UCC.


 


(n)           Unless otherwise
specified herein, any Lien created or purported to be created hereby or by or
pursuant to any Loan Document in favor of the Administrative Agent and each
payment made to the Administrative Agent, is and shall be deemed to have been
created in favor of the Administrative Agent, for its benefit as Administrative
Agent and for the Ratable benefit of the Lenders, or made to and received by
the Administrative Agent for the Ratable benefit of the Lenders.


 


(o)           When used without other
designation of ownership, the term “Subsidiary” means a Subsidiary of Syratech.


 


Section 1.3             Exhibits and
Schedules.  All Exhibits and
Schedules attached hereto are by reference made a part hereof.


 


31



















ARTICLE 2


 


REVOLVING CREDIT FACILITY


 


Section 2.1             Revolving
Credit Loans.  Upon the terms and
subject to the conditions of, and in reliance upon the representations and
warranties made under, this Agreement, each Lender agrees, severally but not
jointly, to make Revolving Credit Loans to the Borrower from time to time from
the Effective Date to but not including the Termination Date, as requested or
deemed requested by the Borrower in accordance with the provisions of Section 2.2, in amounts equal to such Lender’s
Proportionate Share of each Revolving Credit Loan requested or deemed requested
hereunder, up to an aggregate amount at any one time outstanding equal to such
Lender’s Commitment Percentage of the lesser of (i) the Revolving Credit
Facility less the Reserves and
(ii) the Borrowing Base; provided, however,
that no Borrowing of a Revolving Credit Loan shall exceed the Revolving Credit
Availability at the time and the aggregate principal amount of all outstanding
Loans under the Revolving Credit Facility (after giving effect to the Loans
requested) shall not exceed the Borrowing Base.  It is expressly understood and agreed that the Lenders may and
intend to use the Borrowing Base as a maximum ceiling on Loans made to the
Borrower under the Revolving Credit Facility; provided,
however, that it is agreed that should the aggregate outstanding
amount of such Loans exceed the ceiling so determined or any other limitation
set forth in this Agreement, such Loans shall nevertheless constitute Secured
Obligations and, as such, shall be entitled to all benefits thereof and
security therefor.  The principal amount
of any Loan made under the Revolving Credit Facility which is repaid may,
subject to the terms and conditions of this Agreement, be reborrowed by the
Borrower in accordance with the terms of this Section 2.1.  The Administrative Agent’s and each Lender’s
books and records reflecting the date and the amount of each Loan made under
the Revolving Credit Facility and each repayment of principal thereof shall constitute
prima facie evidence of the
accuracy of the information contained therein, subject to the provisions of Section 4.8.


 


Section 2.2             Manner
of Borrowing Revolving Credit Loans. 
Borrowings under the Revolving Credit Facility shall be made as follows:


 


(a)           Requests for Borrowing.


 


(i)            Base Rate Loans.  Unless the Borrower shall previously have
requested a LIBOR Rate Loan and authorized the application of the proceeds
thereof to any purpose described in clauses
(A) through (E) below
and the Lenders shall have disbursed such LIBOR Rate Loan for such purpose, a
request for the Borrowing of a Base Rate Loan shall be made, or shall be deemed
to be made, in the following manner:


 


(A)          The Borrower may
request a Base Rate Loan by giving the Administrative Agent a Notice of
Borrowing, before 11:30 a.m. on the proposed date of the Borrowing, provided that if such notice is received
after 11:30 a.m. on the proposed date of Borrowing, the proposed Borrowing may
be postponed to the next Business Day.


 


(B)           Whenever a check or
other item is presented to a Disbursing Bank for payment against a Controlled
Disbursement Account in an amount greater


 


32

















 


than the then
available balance in such account, such Disbursing Bank shall, and is hereby
irrevocably authorized by the Borrower to, give the Administrative Agent notice
thereof, which notice shall be deemed to be a request for a Base Rate Loan on
the date of such notice in an amount equal to the excess of such check or other
item over such available balance, and such request shall be irrevocable.


 


(C)           Unless payment is
otherwise made by the Borrower (or any of them), the coming due of any amount
required to be paid under this Agreement or any of the Notes as interest shall
be deemed to be a request for a Base Rate Loan on the due date in the amount
required to pay such interest, and such request shall be irrevocable.


 


(D)          Unless payment is
otherwise made by the Borrower, the coming due of any other Secured Obligation
shall be deemed to be a request for a Base Rate Loan on the due date in the
amount then so due, and such request shall be irrevocable.


 


(E)           The receipt by the
Administrative Agent of notification from Bank of America to the effect that a
drawing has been made under a Letter of Credit and that the Borrower has failed
to reimburse Bank of America therefor in accordance with the terms of the
Letter of Credit, any applicable Reimbursement Agreement and Article 3, shall be deemed to be a request
for a Base Rate Loan on the date such notification is received in the amount of
such drawing which is unreimbursed.


 


(ii)           LIBOR Rate Loans.  Provided no Event of Default exists, the
Borrower may request a LIBOR Rate Loan under the Revolving Credit Facility by
giving the Administrative Agent a Notice of Borrowing (which notice shall be
irrevocable) not later than 11:00 a.m. on the date three Business Days before
the day on which the requested LIBOR Rate Loan is to be made.


 


(iii)          Written
Confirmations.  Each written
confirmation of a Notice of Borrowing shall be signed by an officer or agent of
the Borrower in accordance with the provisions of Section 4.17 designated to give such notice by its Board of
Directors, and the Borrower shall notify the Administrative Agent in writing of
the names of such officers and shall provide the Administrative Agent with
specimen signatures of such officers (the Authorized Officers).  The Administrative Agent shall be entitled
to rely conclusively on each such Authorized Officer’s authority to request
Revolving Credit Loans on behalf of the Borrower until the Administrative Agent
receives from the Borrower written notice to the contrary and the
Administrative Agent shall not incur any liability to the Borrower as a result
of acting upon any notice the Administrative Agent believes in good faith to
have been given by an authorized Person. 
The Administrative Agent shall have no duty to verify the authenticity
of the signature appearing on any such notice.


 


(iv)          Notification of
Lenders.  In the case of each LIBOR
Rate Loan and, unless the Administrative Agent has elected periodic settlements
pursuant to Section 4.8, in
the case of each Base Rate Loan, the Administrative Agent shall promptly notify
the Lenders


 


33

















 


of any Notice of Borrowing given or deemed given pursuant to this Section 2.2(a) by 12:00 noon on the
proposed Borrowing date (in the case of Base Rate Loans) or by 3:00 p.m.
two Business Days before the proposed Borrowing date (in the case of LIBOR Rate
Loans).  Not later than 2:30 p.m. on the
proposed Borrowing date, each Lender will make available to the Administrative
Agent, for the account of the Borrower, at the Agent’s Office in funds
immediately available to the Administrative Agent, such Lender’s Proportionate
Share of such Base Rate Loan or LIBOR Rate Loan, as the case may be.


 


(b)           Disbursement of Loans.  The Borrower hereby irrevocably authorizes
the Administrative Agent to disburse the proceeds of each Borrowing requested,
or deemed to be requested, pursuant to Section
2.2(a) as follows:


 


(i)            the proceeds of
each Borrowing requested under Section
2.2(a)(i)(A) (other than the Borrowing of the Initial Loans), 2.2(a)(i)(B) or 2.2(a)(ii) shall be disbursed by the Administrative Agent in
Dollars in immediately available funds by wire transfer to a Controlled
Disbursement Account or, in the absence of a Controlled Disbursement Account,
by wire transfer to such other account as may be agreed upon by the Borrower
and the Administrative Agent from time to time, and the proceeds of the Initial
Loans under Section 2.2(a)(i)(A)
shall be disbursed in accordance with the Initial Notice of Borrowing;


 


(ii)           the proceeds of
each Borrowing deemed requested under Section
2.2(a)(i)(C) or (D)
shall be disbursed by the Administrative Agent by way of direct payment of the
relevant interest or Secured Obligation; and


 


(iii)          the proceeds of
each Borrowing deemed requested under Section
2.2(a)(i)(E) shall be disbursed by the Administrative Agent directly
to Bank of America on behalf of the Borrower.


 


Section 2.3             Repayment
of Revolving Credit Loans.  The
Revolving Credit Loans will be repaid as follows:


 


(a)           The outstanding principal amount of
all the Revolving Credit Loans is due and payable, and shall be repaid by the
Borrower in full together with accrued and unpaid interest on the amount repaid
to the date of repayment, on the Termination Date.


 


(b)           If at any time the aggregate
outstanding unpaid principal amount of the Revolving Credit Loans then
outstanding exceeds the lesser of the amounts referred to in clauses (i) and (ii) of Section 2.1,
the Borrower shall repay the Revolving Credit Loans in an amount sufficient to
reduce the aggregate unpaid principal amount of such Loans by an amount equal
to such excess, together with accrued and unpaid interest on the amount repaid
to the date of repayment.


 


(c)           The Borrower hereby instructs the
Administrative Agent to repay the Revolving Credit Loans outstanding on any day
in an amount equal to the amount received by the Administrative Agent on such
day pursuant to Section 8.1(b); provided that the amount


 


34

















 


received
pursuant to Section 8.1(b) shall
be applied first to repayment of Base Rate Loans and then, subject to the provisions
of Section 4.16 to repayment of
LIBOR Rate Loans.


 


Section 2.4             Revolving
Credit Note.  Each Lender’s
Revolving Credit Loans and the obligation of the Borrower to repay such Loans
shall also be evidenced by a single Revolving Credit Note payable to the order
of such Lender.  Each Revolving Credit
Note shall be dated the Effective Date (or later “effective date” under any
Assignment and Acceptance) and be duly and validly executed and delivered by
the Borrower.


 


Section 2.5             Reduction
of Facility.  Subject to Section 4.9, the amount of the Revolving Credit Facility may
be permanently reduced by the Borrower from time to time, without premium or
penalty, on not less than five Business Days’ notice to the Administrative
Agent, Ratably as to the Lenders’ respective Commitments, in an amount equal to
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and the
Revolving Credit Facility shall be automatically reduced to zero on the
Termination Date.


 


ARTICLE 3


 


LETTER OF CREDIT FACILITY


 


Section 3.1             Agreement
to Issue.  Upon the terms and
subject to the conditions of, and in reliance upon the representations and
warranties made under, this Agreement, 
Bank of America agrees to issue for the account of the Borrower one or
more Letters of Credit in accordance with this Article 3, from time to time during the period commencing on
the Effective Date and ending on the Termination Date.


 


Section 3.2             Amounts.  Bank of America shall not have any
obligation to issue any Letter of Credit:


 


(a)           in a face amount greater than Letter
of Credit Availability at such time; or


 


(b)           which has a stated term longer than
one calendar year (but which may include a renewal or “evergreen” provision
that could, subject to the provisions of Section
3.4(d), result in such Letter of Credit remaining outstanding for
more than one year) or an expiration date (or final maturity date of any time
draft permitted to be presented thereunder) after the last Business Day that is
more than 30 days prior to the Termination Date.


 


Section 3.3             Conditions.  The obligation of Bank of America to issue
any Letter of Credit is subject to the satisfaction of (a) the applicable
conditions precedent contained in Article 5
and (b) the following additional conditions precedent in a manner satisfactory
to the Administrative Agent and Bank of America:


 


(i)            the Borrower shall
have delivered to Bank of America and the Administrative Agent at such times
and in such manner as Bank of America or the Administrative Agent may prescribe
(including by electronic submission) an application in form and substance
satisfactory to Bank of America and the Administrative Agent for the issuance
of the Letter of Credit, a Reimbursement Agreement (which may be a master
reimbursement agreement applicable to more than one Letter of Credit) and such
other documents as may be required pursuant to the terms thereof, and the form
and terms of 


 


35

















 


the proposed Letter of Credit shall be satisfactory to Bank of America
and the Administrative Agent; and


 


(ii)           as of the date of
issuance, no order of any Governmental Authority shall purport by its terms to
enjoin or restrain banks generally from issuing letters of credit of the type
and in the amount of the proposed Letter of Credit, and no law, rule or
regulation applicable to banks generally and no request or directive (whether
or not having the force of law) from any Governmental Authority shall prohibit
the issuance or request that Bank of America refrain from the issuance of letters
of credit generally or the issuance of such Letter of Credit.


 


Section 3.4             Issuance
of Letters of Credit.


 


(a)           Request for Issuance.  The Borrower shall give Bank of America
written notice of the Borrower’s request for the issuance of any standby Letter
of Credit no later than two Business Days prior to the proposed date of
issuance and of any commercial or documentary Letter of Credit no later than
the Business Day prior to the date of issuance.  Such notice shall be irrevocable and shall specify the original
face amount of the Letter of Credit requested, the effective date (which date
shall be a Business Day) of issuance of such requested Letter of Credit,
whether such Letter of Credit may be drawn in a single or in multiple draws,
the date on which such requested Letter of Credit is to expire (which date
shall be a Business Day earlier than the 30th day prior to the Termination
Date), the purpose for which such Letter of Credit is to be issued and the
beneficiary of the requested Letter of Credit. 
The Borrower shall attach to such notice the form of the Letter of
Credit that the Borrower request to be issued.


 


(b)           Responsibilities of the Agent;
Issuance.  The Administrative Agent
shall determine (including at the request of Bank of America, as issuer), as of
the Business Day immediately preceding the requested effective date of issuance
of the Letter of Credit set forth in the notice from the Borrower pursuant to Section 3.4(a), the amount of the Letter of
Credit Availability.  If (i) the form of
the Letter of Credit delivered by the Borrower to Bank of America is acceptable
to Bank of America and, as to any standby Letter of Credit, the Administrative
Agent in their sole, reasonable discretion, (ii) the undrawn face amount of the
requested Letter of Credit is less than or equal to the Letter of Credit
Availability and (iii) the Administrative Agent has received a certificate from
the Borrower stating that the applicable conditions set forth in Article 5 have been satisfied (and, absent
prior written notice to the contrary, submission of a duly executed (including
by tested electronic submission) Letter of Credit application shall constitute
a representation by the Borrower to such effect), then Bank of America will
cause the Letter of Credit to be issued.


 


(c)           Notice of Issuance.  Promptly after the issuance of any standby
Letter of Credit in a face amount greater than $250,000, Bank of America shall
give the Administrative Agent written or facsimile notice, or telephonic notice
confirmed promptly thereafter in writing, of the issuance of such Letter of
Credit, and the Administrative Agent shall give each Lender written or
facsimile notice, or telephonic notice confirmed promptly thereafter in
writing, of the issuance of such Letter of Credit.  Bank of America shall furnish a monthly report of Letter of
Credit and Bankers Acceptance activity to the Administrative Agent not later
than the 10th day of each month with respect to the preceding calendar month
showing Letters of Credit issued and


 


36

















 


outstanding
and Bankers Acceptances created and outstanding by account party, face amount
and expiration date or maturity date.


 


(d)           No Extension or Amendment.  No Letter of Credit shall be extended or
amended unless the requirements of this Section
3.4 are met as though a new Letter of Credit were being requested
and issued.


 


Section 3.5             Duties
of Bank of America.  Any action
taken or omitted to be taken by Bank of America under or in connection with any
Letter of Credit, if taken or omitted in the absence of gross negligence or
willful misconduct, shall not result in any liability of Bank of America to any
Lender or relieve any Lender of its obligations hereunder to Bank of
America.  In determining whether to pay
under any Letter of Credit, Bank of America shall have no obligation to any
Lender other than to confirm that any documents required to be delivered under
such Letter of Credit in connection with such drawing have been presented and
appear on their face to comply with the requirements of such Letter of Credit.


 


Section 3.6             Payment
of Reimbursement Obligations.


 


(a)           Payment to Issuer.  Notwithstanding any provisions to the
contrary in any Reimbursement Agreement, the Borrower, agrees to reimburse Bank
of America for any drawings (whether partial or full) under each Letter of
Credit issued by Bank of America, including, without being limited to but
without duplication paying the amount of any Bankers Acceptance upon
presentation thereof at maturity, and agree to pay to Bank of America the
amount of all other Reimbursement Obligations and other amounts payable to Bank
of America under or in connection with such Letter of Credit immediately when
due, irrespective of any claim, set-off, defense or other right which the Borrower
may have at any time against Bank of America or any other Person.


 


(b)           Recovery or Avoidance of Payments.  In the event any payment by or on behalf of
the Borrower with respect to any Letter of Credit (or any Reimbursement
Obligation relating thereto) received by Bank of America, or by the
Administrative Agent and distributed by the Administrative Agent to the Lenders
on account of their respective participations therein, is thereafter set aside,
avoided or recovered from Bank of America or the Administrative Agent in
connection with any receivership, liquidation or bankruptcy proceeding, the
Lenders shall, upon demand by the Administrative Agent, pay to the
Administrative Agent, for the account of the Administrative Agent or Bank of
America, their respective Proportionate Shares of such amount set aside,
avoided or recovered together with interest at the rate required to be paid by
the Administrative Agent (or Bank of America) upon the amount required to be
repaid by it.


 


Section 3.7             Participations.


 


(a)           Purchase of Participations.  On the Effective Date with respect to any
Letters of Credit or Bankers Acceptances outstanding on such date and
immediately upon issuance by Bank of America of a Letter of Credit or creation
by Bank of America of a Bankers Acceptance with respect to all other Letters of
Credit, each Lender shall be deemed to have irrevocably and unconditionally
purchased and received without recourse or warranty, an undivided interest and
participation in such Letter of Credit or Bankers Acceptance, equal to such
Lender’s Proportionate Share of the face amount thereof (including, without
limitation, all


 


37

















 


obligations of
the Borrower with respect thereto, other than amounts owing to Bank of America
under Section 4.2(c), and any
security therefor or guaranty pertaining thereto).


 


(b)           Sharing of Letter of Credit
Payments.  In the event that Bank of
America makes a payment under any Letter of Credit and Bank of America shall
not have been repaid such amount pursuant to Section
3.6, then Bank of America shall be deemed to have made a Non-Ratable
Loan in the amount of such payment, and notwithstanding the occurrence or
continuance of a Default or Event of Default at the time of such payment, such
Non-Ratable Loan shall be subject to the provisions of Section 4.8(b) and the absolute obligations
of the Lenders to pay for their respective participation interests therein.


 


(c)           Sharing of Reimbursement
Obligation Payments.  Whenever Bank
of America receives a payment from or on behalf of the Borrower on account of a
Reimbursement Obligation as to which the Administrative Agent has previously
received for the account of Bank of America payment from a Lender pursuant to
this Section 3.7, Bank of America
shall promptly pay to the Administrative Agent, for the benefit of such Lender,
such Lender’s Proportionate Share of the amount of such payment from the
Borrower in Dollars.  Each such payment
shall be made by Bank of America on the Business Day on which Bank of America
receives immediately available funds from the Administrative Agent pursuant to
the immediately preceding sentence, if received prior to 12:00 noon on such
Business Day, and otherwise on the next succeeding Business Day.


 


(d)           Documentation.  Upon the request of any Lender, the
Administrative Agent shall furnish to such Lender copies of any Letter of
Credit, Reimbursement Agreement or application for any Letter of Credit and
such other documentation as may reasonably be requested by such Lender.


 


(e)           Obligations Irrevocable.  The obligations of each Lender to make
payments to the Administrative Agent with respect to any Letter of Credit and
their participations therein pursuant to the provisions of Section 4.8(c) hereof or otherwise and the
obligations of the Borrower to make payments to Bank of America or to the
Administrative Agent, for the account of the Lenders, shall be irrevocable,
shall not be subject to any qualification or exception whatsoever and shall be
made in accordance with the terms and conditions of this Agreement (assuming,
in the case of the obligations of the Lenders to make such payments, that the
Letter of Credit has been issued in accordance with Section 3.4), including, without limitation, any of the
following circumstances:


 


(i)            Any lack of
validity or enforceability of this Agreement or any of the other Loan
Documents;


 


(ii)           The existence of
any claim, set-off, defense or other right which the Borrower may have at any
time against a beneficiary named in a Letter of Credit or any transferee of any
Letter of Credit (or any Person for whom any such transferee may be acting),
any Lender, Bank of America or any other Person, whether in connection with
this Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transactions between the
Borrower or any other Person and the beneficiary named in any Letter of
Credit);


 


38

















 


(iii)          Any draft,
certificate or any other document presented under the Letter of Credit upon
which payment has been made in good faith and according to its terms proving to
be forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;


 


(iv)          The surrender or
impairment of any Collateral, Real Estate or any other security for the Secured
Obligations or the performance or observance of any of the terms of any of the
Loan Documents;


 


(v)           The occurrence of
any Default or Event of Default; or


 


(vi)          Bank of America’s or
the Administrative Agent’s failure to deliver the notice provided for in Section 3.4(c).


 


Section 3.8             Indemnification,
Exoneration.


 


(a)           Indemnification.  In addition to amounts payable as elsewhere
provided in this Article 3, the
Borrower agrees, to protect, indemnify, pay and save the Lenders and the
Administrative Agent harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys’ fees) which any Lender or the Administrative Agent may incur or be
subject to as a consequence, directly or indirectly, of


 


(i)            the issuance of any
Letter of Credit or creation of any Bankers Acceptance, other than as a result
of its gross negligence or willful misconduct, as determined by a court of
competent jurisdiction, or


 


(ii)           the failure of Bank
of America to honor a drawing under any Letter of Credit as a result of any act
or omission, whether rightful or wrongful, of any present or future de jure or de facto governmental authority (all such acts or omissions
being hereinafter referred to collectively as Government Acts).


 


(b)           Assumption of Risk by the Borrower.  As among the Borrower, the Lenders and the
Administrative Agent, the Borrower assumes all risks of the acts and omissions
of, or misuse of any of the Letters of Credit by, the respective beneficiaries
of such Letters of Credit.  In
furtherance and not in limitation of the foregoing, subject to the provisions
of the applications for the issuance of Letters of Credit, the Lenders and the
Administrative Agent shall not be responsible for:


 


(i)            the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any Person in connection with the application for and issuance of and
presentation of drafts with respect to any of the Letters of Credit, even if it
should prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged;


 


(ii)           the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason;


 


39

















 


(iii)          the failure of the
beneficiary of any Letter of Credit to comply duly with conditions required in
order to draw upon such Letter of Credit;


 


(iv)          errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher;


 


(v)           errors in
interpretation of technical terms;


 


(vi)          any loss or delay in
the transmission or otherwise of any document required in order to make a
drawing under any Letter of Credit or of the proceeds thereof;


 


(vii)         the misapplication
by the beneficiary of any Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or


 


(viii)        any consequences
arising from causes beyond the control of the Lenders or the Administrative Agent,
including, without limitation, any Government Acts.


 


None
of the foregoing shall affect, impair or prevent the vesting of any of the
Administrative Agent’s rights or powers under this Section 3.8.


 


(c)           Exoneration.  In furtherance and extension, and not in
limitation, of the specific provisions set forth above, any action taken or
omitted by the Administrative Agent, Bank of America or any Lender under or in
connection with any of the Letters of Credit or any related certificates, if
taken or omitted in good faith, shall not result in any liability of any
Lender, Bank of America, or the Administrative Agent to the Borrower or relieve
the Borrower of any of its obligations hereunder to any such Person.


 


Section 3.9             Supporting
Letter of Credit; Cash Collateral Account. 
Upon the occurrence of an Event of Default or, if, notwithstanding the
provisions of Section 3.2(b), any
Letter of Credit or Bankers Acceptance is outstanding on the Termination Date,
then on or prior to the Termination Date, the Borrower shall, promptly on
demand by the Administrative Agent, deposit with the Administrative Agent, for
the ratable benefit of the Lenders, with respect to each Letter of Credit and
Bankers Acceptance then outstanding, as the Administrative Agent shall specify,
either (a) a standby letter of credit (a Supporting Letter of Credit) in form and
substance satisfactory to the Administrative Agent, issued by an issuer
satisfactory to the Administrative Agent in its reasonable judgment in an
amount equal to 105% of the greatest amount for which such Letter of Credit may
be drawn or the face amount of such Bankers Acceptance, as the case may be,
under which Supporting Letter of Credit the Administrative Agent shall be
entitled to draw amounts necessary to reimburse the Administrative Agent and
the Lenders for payments made by the Administrative Agent and the Lenders under
such Letter of Credit, such Bankers Acceptance or under any reimbursement or
guaranty agreement with respect thereto, or (b) Cash Collateral in an amount
equal to 105% of the amount necessary to reimburse the Administrative Agent and
the Lenders for payments made by the Administrative Agent and the Lenders under
such Letter of Credit, such Bankers Acceptance or under any reimbursement or
guaranty agreement with respect thereto. 
Such Supporting Letter of Credit or Cash Collateral shall be held by the
Administrative Agent for the benefit of the Lenders, as security for, and to
provide for the payment of, the Reimbursement Obligations.  In addition, the Administrative Agent may


 


40

















 


at any time
after the occurrence of such an Event of Default that is continuing or the
Termination Date apply any or all of such Cash Collateral to the payment of any
or all of the Secured Obligations then due and payable.  The Cash Collateral shall be deposited in
the Cash Collateral Account or an Investment Account and shall be administered
in accordance with the provisions of Section
4.16.  If the Administrative
Agent has demanded and received Cash Collateral by reason of the occurrence of
an Event of Default and such Event of Default has been cured or waived by the
requisite Lenders (as evidenced by a written acknowledgment thereof by the
Administrative Agent) and no other Default or Event of Default has occurred and
is continuing or would exist after giving effect to any requested release of
such Cash Collateral, and the Borrower has certified such fact to the Lenders
and the Administrative Agent, then the Administrative Agent shall release to
the Borrower, upon its request, such Cash Collateral.


 


ARTICLE 4


 


GENERAL LOAN PROVISIONS


 


Section 4.1             Interest.


 


(a)           Base Rate Loans.  Subject to the provisions of Section 4.1(d), the Borrower will pay
interest on the unpaid principal amount of each Base Rate Loan, for each day
from the day such Loan is made until such Loan is paid (whether at maturity, by
reason of prepayment or acceleration, or otherwise) or is converted to a Loan
of a different Type, at a rate per annum equal to the sum of (i) the Applicable
Margin and (ii) the Base Rate, payable monthly in arrears as it accrues on each
Interest Payment Date.


 


(b)           LIBOR Rate Loans.  Subject to the provisions of Section 4.1(d), the Borrower will pay
interest on the unpaid principal amount of each LIBOR Rate Loan for the
applicable Interest Period at a rate per annum equal to the sum of (i) the
Applicable Margin and (ii) the LIBOR Rate, payable in arrears as it accrues on
each Interest Payment Date, on the last day of such Interest Period, when such
LIBOR Rate Loan is due (whether at maturity, by reason of prepayment or
acceleration or otherwise) or is continued or converted to a Loan of a
different Type.


 


(c)           Other Secured Obligations.  The Borrower will, to the extent permitted
by Applicable Law, pay interest on the unpaid principal amount of any Secured
Obligation that is due and payable, other than the Loans, in accordance with Section 4.1(a) or (d), as applicable, as if such Secured
Obligation were a Base Rate Loan.


 


(d)           Default Rate.  If there shall occur and be continuing an
Event of Default, at the election of the Required Lenders, the unpaid principal
amount of the Loans and other Secured Obligations shall no longer bear interest
in accordance with the terms of Section
4.1(a), 4.1(b) or 4.1(c), but shall bear interest for each
day from the date of such Event of Default until such Event of Default shall
have been cured or waived at a rate per annum equal to the sum of (i) the
Default Margin and (ii) the rate otherwise applicable to such Loan or other
Secured Obligation, payable on demand. 
The interest rate provided for in the preceding sentence shall, to the
extent permitted by Applicable Law, apply to and accrue on the amount of any
judgment entered with respect to any Secured Obligation and shall continue to
accrue at such rate during any proceeding described in Section 12.1(f) or (g).


 


41

















 


(e)           Calculation of Interest.  The interest rates provided for in Sections 4.1(a), (b), (c) and (d) shall be computed on the basis of a
year of 360 days and the actual number of days elapsed.  Each interest rate determined with reference
to the Base Rate shall be adjusted automatically as of the opening of business
on the effective date of each change in the Base Rate.


 


(f)            Maximum Rate.  It is not intended by the Lenders, and
nothing contained in this Agreement or the Notes shall be deemed, to establish
or require the payment of a rate of interest in excess of the maximum rate
permitted by Applicable Law (the Maximum Rate).  If, in any month, the Effective Interest
Rate, absent such limitation, would have exceeded the Maximum Rate, then the
Effective Interest Rate for that month shall be the Maximum Rate, and, if in
future months, the Effective Interest Rate would otherwise be less than the
Maximum Rate, then the Effective Interest Rate shall remain at the Maximum Rate
until such time as the amount of interest paid hereunder equals the amount of
interest which would have been paid if the same had not been limited by the
Maximum Rate.  In the event that, upon
payment in full of the Secured Obligations, the total amount of interest paid
or accrued under the terms of this Agreement is less than the total amount of
interest which would have been paid or accrued if the Effective Interest Rate
had at all times been in effect, then the Borrower shall, to the extent
permitted by Applicable Law, pay to the Lenders an amount equal to the excess,
if any, of (i) the lesser of (ii) the amount of interest which would
have been charged if the Maximum Rate had, at all times, been in effect
(iii) the amount of interest which would have accrued had the Effective
Interest Rate, at all times, been in effect and (iv) the amount of
interest actually paid or accrued under this Agreement.  In the event the Lenders receive, collect or
apply as interest any sum in excess of the Maximum Rate, such excess amount
shall be applied to the reduction of the principal balance of the Secured
Obligations, and if no such principal is then outstanding, such excess or part
thereof remaining, shall be paid to the Borrower.  For the purposes of computing the Maximum Rate, to the extent
permitted by applicable law, all interest and charges, discounts, amounts,
premiums or fees deemed to constitute interest under applicable law, shall be
amortized, prorated, allocated and spread in substantially equal parts
throughout the full term of this Agreement. 
The provisions of this Section 4.1(f)
shall be deemed to be incorporated into every Loan Document (whether or not any
provision of this Section 4.1(f)
is specifically referred to therein).


 


Section 4.2             Certain
Fees.


 


(a)           Extension Fee.  On the Effective Date, as additional
consideration for the extension of the Termination Date provided for under this
Agreement, the Borrower shall pay to the Administrative Agent, for the ratable
benefit of the Lenders, an extension fee in the amount of $525,000.


 


(b)           Agent Fee.  For administration and other services
performed by the Administrative Agent in connection with its continuing
administration of this Agreement, the Borrower shall pay to the Administrative
Agent, for its own account and not for the account of the Lenders, an annual
fee of $75,000, payable on the Effective Date and on each anniversary thereof
thereafter for so long as any Secured Obligation shall remain outstanding or
the Revolving Credit Facility shall not have been terminated.


 


(c)           Unused Fee.  In connection with and as consideration for
the holding available for the use of the Borrower hereunder the full amount of
the Revolving Credit Facility,


 


42

















 


the Borrower
will pay a fee to the Administrative Agent, for the Ratable benefit of the
Lenders, for each day from the Effective Date until the Termination Date, in an
amount equal to the Unused Fee on the Unused Portion of the Revolving Credit
Facility for such day.  The Unused Fee
shall be payable in arrears on each Interest Payment Date and on the date of
any permanent reduction in the Revolving Credit Facility.


 


(d)           Letter of Credit and Acceptance
Fees.


 


(i)            The Borrower agrees
to pay to the Administrative Agent, for the Ratable benefit of the Lenders,
Letter of Credit fees equal to (A) the greater of $125 or 1/4 of 1% on the face
amount of each commercial or documentary Letter of Credit and (B) the
Applicable Margin on LIBOR Rate Loans in effect from time to time on the
average daily aggregate Letter of Credit Amount of all standby Letters of
Credit from time to time outstanding during the term of this Agreement.  Such fees shall be payable to the
Administrative Agent for the Ratable benefit of the Lenders (x) as to
commercial or documentary Letters of Credit, on the date of the first drawing
thereunder or if the Letter of Credit expires undrawn, on the date of expiration
and (y) as to standby Letters of Credit, monthly in arrears on the first day of
each month, and all such fees shall be calculated based on a year of 360 days
and the actual number of days in the stated term thereof.


 


(ii)           The Borrower agrees
to pay to the Administrative Agent, for the account of Bank of America, a fee
in the amount of the greater of $125 or 1/8 of 1% of the face amount of each
standby Letter of Credit issued on or after the Effective Date, payable in
advance on the date of issuance, and, as to all Letters of Credit, the usual
and customary letter of credit fees of Bank of America, as and when assessed.


 


(iii)          The Borrower agrees
to pay to the Administrative Agent, for the Ratable account of the Lenders, on
the face amount of each Bankers Acceptance, an acceptance commission at a rate
equal to the Applicable Margin applicable to LIBOR Rate Loans (A) as of the
Effective Date as to Bankers Acceptances outstanding on the Effective Date or
(B) at the time of creation of such Bankers Acceptance as to all Bankers
Acceptances created after the Effective Date, for the period from the Effective
Date or the later date of its creation, as applicable, to the stated maturity
date thereof, payable on said maturity date.


 


(e)           Collection
Fee.  During the period from and
including the Effective Date to and including the Termination Date, the
Borrower will pay to the Administrative Agent for its own account on each
Interest Payment Date an amount computed at the Effective Interest Rate
applicable to Base Rate Loans on each remittance (other than a remittance
received by the Administrative Agent via wire transfer or otherwise received in
immediately available funds) received by the Administrative Agent against
Receivables (as contemplated by Section 8.1
hereof) during the preceding month, from the close of business on the date of
receipt of each such remittance until the close of business on the Business Day
following the receipt of the remittance, as compensation for delays in the
collection and clearance of checks and other remittances.


 


43

















 


(f)            General.  All fees provided for herein and in any
separate fee letter to which the Administrative Agent is a party shall be
computed based on a year of 360 days for the actual number of days elapsed and
shall be fully earned by the identified recipient thereof when due and payable
and, except as otherwise set forth herein or required by Applicable Law, shall
not be subject to refund or rebate.  All
fees provided for in this Section 4.2
and in any such separate letter are compensation for services and are not, and
shall not be deemed to be, interest or a charge for the use of money.


 


Section 4.3             Manner
of Payment.


 


(a)           Except as otherwise expressly
provided in Section 8.1(b),
each payment (including prepayments) by the Borrower on account of the
principal of or interest on the Loans or of any other amounts payable to the
Administrative Agent or the Lenders under this Agreement or any Note shall be
made not later than 12:00 noon on the date specified for payment under this
Agreement to the Administrative Agent, for its own account or the account of
the Lenders, as the case may be, at the Agent’s Office, in Dollars, in
immediately available funds and shall be made without any setoff, counterclaim
or deduction whatsoever.  Any payment
received after such time but before 4:00 p.m. on such day shall be deemed a
payment on such date for the purposes of Section 12.1,
but for all other purposes shall be deemed to have been made on the next
succeeding Business Day.


 


(b)           The Borrower hereby irrevocably
authorizes each Lender and each Affiliate of such Lender and each participant
herein to charge any account of the Borrower maintained with such Lender or
such Affiliate or participant with such amounts as may be necessary from time
to time to pay any Secured Obligations (whether or not owed to such Lender,
Affiliate or participant) which are not paid when due.


 


Section 4.4             General.  If any payment under this Agreement or any
Note shall be specified to be made on a day which is not a Business Day, it
may, at the Administrative Agent’s discretion, be made on the next succeeding
day which is a Business Day and any such extension of time shall be included in
computing interest, if any, payable in connection with such payment.  All payments by the Borrower under any Loan
Document shall be without deduction, set-off, counterclaim or defense of any
kind.


 


Section 4.5             Loan
Accounts; Statements of Account.


 


(a)           Each Lender shall open and maintain
on its books at least one loan account in the Borrower’s name (each, a Loan Account and collectively, the Loan Accounts). 
Each such Loan Account shall show as debits thereto each Loan made under
this Agreement by such Lender to the Borrower and as credits thereto all
payments received by such Lender and applied to principal of such Loans, so
that the balance of the Loan Account at all times reflects the principal amount
due such Lender from the Borrower.


 


(b)           The Administrative Agent shall
maintain on its books a control account for the Borrower in which shall be
recorded (i) the amount of each disbursement of Loans made hereunder,
(ii) the amount of any principal or interest due or to become due from the
Borrower hereunder, and (iii) the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender’s share
therein.


 


44

















 


(c)           The entries made in the accounts
pursuant to subsections (a) and (b) shall be prima facie evidence, in the
absence of manifest error, of the existence and amounts of the obligations of
the Borrower therein recorded and in case of discrepancy between such accounts,
in the absence of manifest error, the accounts maintained pursuant to subsection (b) shall be controlling.


 


(d)           The Administrative Agent will account
to the Borrower monthly with a statement of Loans, charges and payments made to
and by the Borrower pursuant to this Agreement, and such accounts rendered by
the Administrative Agent shall be deemed final, binding and conclusive, save
for manifest error, unless the Administrative Agent is notified by the Borrower
in writing to the contrary within 30 days of the date the account to the
Borrower was so rendered.  Such notice
by the Borrower shall be deemed an objection to only those items specifically
objected to therein.  Failure of the
Administrative Agent to render such account shall in no way affect the rights
of the Administrative Agent or of the Lenders hereunder.


 


Section 4.6             Termination
of Agreement.  Subject to the
provisions of Section 4.9, the
Borrower shall have the right, at any time, to terminate this Agreement upon
not less than 30 Business Days’ prior written notice, which notice shall
specify the effective date of such termination.  Upon receipt of such notice, the Administrative Agent shall
promptly notify each Lender thereof.  On
the date specified in such notice, such termination shall be effected, provided, that the Borrower shall, on or
prior to such date, pay to the Administrative Agent, for its account and the
account of the Lenders, in same day funds, an amount equal to all Secured
Obligations (other than with respect to Letter of Credit Obligations)
outstanding on such date, including, without limitation, all (i) accrued
interest thereon, (ii) all accrued fees provided for hereunder, and
(iii) any amounts payable to the Lenders pursuant to Sections 4.9, 4.10, 4.16, 15.2, 15.3 and 15.11, and, in addition thereto, shall
deliver to the Administrative Agent, in respect of each outstanding Letter of
Credit and Bankers Acceptance, either a Supporting Letter of Credit or Cash
Collateral as provided in Section 3.9.  Additionally, the Borrower shall provide the
Administrative Agent and the Lenders with indemnification in form and substance
satisfactory to the Administrative Agent in its reasonable judgment with
respect to such matters as the Administrative Agent and the Lenders shall
reasonably require and a general release of all claims.  Following a notice of termination as
provided for in this Section 4.6
and upon payment in full of the amounts specified in this Section 4.6, and execution and delivery of
any required indemnification and release, this Agreement shall be terminated
and the Administrative Agent, the Lenders and the Borrower shall have no
further obligations to any other party hereto, except for the obligations to
the Administrative Agent and the Lenders pursuant to Section 15.11 hereof, which shall survive any termination
of this Agreement.


 


Section 4.7             Making
of Loans.


 


(a)           Nature of Obligations of Lenders
to Make Loans.  The obligations of
the Lenders under this Agreement to make the Loans are several and are not
joint or joint and several.


 


(b)           Assumption by Agent.  Subject to the provisions of Section 4.8 and notwithstanding the
occurrence or continuance of a Default or Event of Default or other failure of
any condition to the making of Loans under the Revolving Credit Facility
hereunder, unless the Administrative Agent shall have received notice from a
Lender in accordance with the


 


45

















 


provisions of Section 4.7(c) prior to a proposed
Borrowing date that such Lender will not make available to the Administrative
Agent such Lender’s Proportionate Share of the Revolving Credit Loan to be
borrowed on such date, the Administrative Agent may assume that such Lender
will make such Proportionate Share available to the Administrative Agent in
accordance with Section 2.2(a),
and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount.  If and to the extent such Lender shall not
make such Proportionate Share available to the Administrative Agent, such
Lender and the Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Administrative Agent at the Effective
Interest Rate or, if lower, subject to Section
4.1(f), the Maximum Rate if repaid by the Borrower or at the Federal
Funds Effective Rate, if paid by such Lender. 
If such Lender shall repay to the Administrative Agent such
corresponding amount, the amount so repaid shall constitute such Lender’s
Proportionate Share of the Loan made on such Borrowing date for purposes of
this Agreement.  The failure of any
Lender to make its Proportionate Share of any Loan available shall not (without
regard to whether the Borrower shall have returned the amount thereof to the
Administrative Agent in accordance with this Section 4.7)
relieve it or any other Lender of its obligation, if any, hereunder to make its
Proportionate Share of the Loan available on such Borrowing date, but no Lender
shall be responsible for the failure of any other Lender to make its
Proportionate Share of a Loan available on the Borrowing date.


 


(c)           Delegation of Authority to Agent.  Without limiting the generality of Section 15.1, each Lender expressly authorizes
the Administrative Agent to determine on behalf of such Lender (i) any
reduction or increase of advance rates applicable to the Borrowing Base, so
long as such advance rates do not at any time exceed the applicable rates set
forth in the definition “Borrowing Base,” (ii) the creation or elimination of
any reserves (other than the Usage Reserves) against the Revolving Credit
Facility and the Borrowing Base and (iii) the designation of any Inventory or
Receivables as not constituting Eligible Inventory or Eligible
Receivables.  Such authorization may be
withdrawn by the Required Lenders by giving the Administrative Agent written
notice of such withdrawal signed by the Required Lenders; provided, however, that unless otherwise
agreed by the Administrative Agent such withdrawal of authorization shall not
become effective until the 5th Business Day after receipt of such notice by the
Administrative Agent.  Thereafter, the
Required Lenders shall jointly instruct the Administrative Agent in writing
regarding such matters with such frequency as the Required Lenders shall
jointly determine.  Unless and until the
Administrative Agent shall have received written notice from the Required
Lenders as to the existence of a Default, an Event of Default or some other
circumstance which would relieve the Lenders of their respective obligations to
make Loans hereunder, which notice shall be in writing and shall be signed by
the Required Lenders and shall expressly state that the Required Lenders do not
intend to make available to the Administrative Agent such Lenders’ Ratable
Share of Loans made after the effective date of such notice, the Administrative
Agent shall be entitled to continue to make the assumptions described in Section 4.7(b).  After receipt of the notice described in the preceding sentence,
which shall become effective on the third Business Day after receipt of such
notice by the Administrative Agent unless otherwise agreed by the
Administrative Agent, the Administrative Agent shall be entitled to make the
assumptions described in Section 4.7(b)
as to any Loans as to which it has not received a written notice to the
contrary prior to 11:00 a.m. on the Business Day next preceding the day on
which the Loan is to be made.  The
Administrative Agent shall not be required to make any Loan as to which it
shall have received notice by a Lender of such Lender’s


 


46

















 


intention not
to make its Ratable Share of such Loan available to the Administrative
Agent.  Any withdrawal of authorization
under this Section 4.7(c) shall
not affect the validity of any Loans made prior to the effectiveness thereof.


 


(d)           Agent’s Additional Authority.  Any provision of this Agreement or any other
Loan Document to the contrary notwithstanding, each Lender hereby authorizes
the Administrative Agent, in its sole discretion and for the Ratable account of
each such Lender, to request that Bank of America make Base Rate Loans entitled
to all the benefits of this Agreement available to Non-Ratable Loans to the
Borrower in excess of Revolving Credit Availability at the time such Loans
(“Overadvance Loans”) are made, provided,
that the aggregate outstanding principal amount of all Loans shall not exceed
the Borrowing Base (i) by an amount greater than $3,000,000 or (ii) for more
than five consecutive Business Days in any Fiscal Year or (iii) for more than
10 days in any Fiscal Year and provided,
further, that in no event shall the aggregate outstanding principal
amount of all Loans exceed the Revolving Credit Facility less the Reserves.  Notwithstanding the foregoing, in the event
that an Overadvance Loan is intentionally and knowingly requested by the
Administrative Agent and made by Bank of America, the purpose of such
Overadvance Loan shall be, as determined by the Administrative Agent in its
reasonable discretion, to preserve or protect the Collateral or the value
thereof, to enhance the likelihood of, or to maximize the amount of, repayment
of the Loans and other Secured Obligations, or to pay any other amount
chargeable to the Borrower pursuant to the terms of the Loan Documents,
including costs, fees and expenses. 
Notwithstanding the foregoing, the Required Lenders may at any time
revoke in writing the Administrative Agent’s authority to make Overadvance
Loans.  Nothing in this Section 4.7 shall be deemed to subject the Administrative
Agent or Bank of America to liability to the Lenders in the event a Loan is not
intentionally or knowingly made as an Overadvance Loan or a Loan or portion
thereof becomes an Overadvance Loan after it has been made.


 


Section 4.8             Settlement
Among Lenders.


 


(a)           Revolving Credit Loans.  It is agreed that each Lender’s Net
Outstandings are intended by the Lenders to be equal at all times to such
Lender’s Ratable Share of the aggregate principal amount of all Revolving
Credit Loans outstanding. 
Notwithstanding such agreement, the several and not joint obligation of
each Lender to make its Ratable Share of Loans under the Revolving Credit Facility
in accordance with the terms of this Agreement and each Lender’s right to
receive its Ratable Share of principal payments on Revolving Credit Loans, the
Lenders agree that in order to facilitate the administration of this Agreement
and the Loan Documents that settlement among them may take place on a periodic
basis in accordance with the provisions of this Section 4.8.


 


(b)           Settlement Procedures as to
Revolving Credit Loans.  To the
extent and in the manner hereinafter provided in this Section 4.8, settlement among the Lenders
as to Base Rate Loans may occur periodically on Settlement Dates determined
from time to time by the Administrative Agent, which may occur before or after
the occurrence or during the continuance of a Default or Event of Default and
whether or not all of the conditions set forth in Section 6.2 have been met. 
On each Settlement Date payments shall be made by or to Bank of America
and the other Lenders in the manner provided in this Section 4.8 in accordance with the Settlement Report delivered
by the Administrative Agent pursuant to the provisions of this Section 4.8 in respect of such Settlement
Date so that as of each Settlement Date, and after giving effect to the


 


47

















 


transactions
to take place on such Settlement Date, each Lender’s Net Outstandings shall
equal such Lender’s Ratable Share of the Revolving Credit Loans.


 


(i)            Selection of
Settlement Dates.  If the
Administrative Agent elects, in its discretion, but subject to the consent of
Bank of America, to settle accounts among the Lenders with respect to principal
amounts of Base Rate Loans less frequently than each Business Day, then the
Administrative Agent shall designate periodic Settlement Dates which may occur
on any Business Day after the Effective Date; provided,
however, that (A) the Administrative Agent shall designate as a
Settlement Date any Business Day which is an Interest Payment Date and
(B) a Settlement Date shall occur not less often than every five Business
Days.  The Administrative Agent shall
designate a Settlement Date by delivering to each Lender a Settlement Report
not later than 12:00 noon on the proposed Settlement Date, which Settlement
Report will be in the form of Exhibit E
hereto and shall be with respect to the period beginning on the next preceding
Settlement Date and ending on such designated Settlement Date.


 


(ii)           Non-Ratable
Loans and Payments.  Between
Settlement Dates, the Administrative Agent shall request and Bank of America
may (but shall not be obligated to) advance to the Borrower out of Bank of
America’s own funds, the entire principal amount of any Base Rate Loan
requested or deemed requested pursuant to Section
2.2(a) (any such Base Rate Loan being referred to as a Non-Ratable Loan).  The making of each Non-Ratable Loan by Bank
of America shall be deemed to be a purchase by Bank of America of a 100%
participation in each other Lender’s Proportionate Share of such Non-Ratable
Loan.  All payments of principal,
interest and any other amount with respect to such Non-Ratable Loan shall be
payable to and received by the Administrative Agent for the account of Bank of
America.  Upon demand by Bank of
America, with notice thereof to the Administrative Agent, each other Lender
shall pay to Bank of America, as the repurchase of such participation, an
amount equal to 100% of such Lender’s Proportionate Share of the principal
amount of such Non-Ratable Loan.  Any
payments received by the Administrative Agent between Settlement Dates which in
accordance with the terms of this Agreement are to be applied to the reduction
of the outstanding principal balance of Revolving Credit Loans, shall be paid
over to and retained by Bank of America for such application, and such payment
to and retention by Bank of America shall be deemed, to the extent of each
other Lender’s Proportionate Share of such payment, to be a purchase by each
such other Lender of a participation in the Revolving Credit Loans (including
the repurchase of participations in Non-Ratable Loans) held by Bank of America.  Upon demand by another Lender, with notice
thereof to the Administrative Agent, Bank of America shall pay to the
Administrative Agent, for the account of such other Lender, as a repurchase of
such participation, an amount equal to such other Lender’s Proportionate Share of
any such amounts (after application thereof to the repurchase of any
participations of Bank of America in such other Lender’s Proportionate Share of
any Non-Ratable Loans) paid only to Bank of America by the Administrative
Agent.


 


(iii)          Settlement.  On each Settlement Date each Lender shall
transfer to the Administrative Agent and the Administrative Agent shall
transfer to each Lender such amounts as are necessary to insure that, after
giving effect to all such transfers, each


 


48

















 


Lender’s Net Outstandings are equal to such Lender’s Proportionate
Share of the aggregate principal amount of all Revolving Loans then
outstanding.


 


(iv)          Return of
Payments.  If any amounts received
by Bank of America in respect of the Secured Obligations are later required to
be returned or repaid by Bank of America to the Borrower or any other obligor
or their respective representatives or successors in interest, whether by court
order, settlement or otherwise, in excess of Bank of America’s Proportionate
Share of all such amounts required to be returned by all Lenders, each other
Lender shall, upon demand by Bank of America with notice to the Administrative
Agent, pay to the Administrative Agent for the account of Bank of America, an
amount equal to the excess of such Lender’s Proportionate Share of all such
amounts required to be returned by all Lenders over the amount, if any,
returned directly by such Lender.


 


(v)           Payments to
Agent, Lenders.


 


(A)          Payment by any Lender
to the Administrative Agent shall be made not later than 1:30 p.m. on the
Business Day such payment is due, provided
that if such payment is due on demand by another Lender, such demand is made on
the paying Lender not later than 10:00 a.m. on such Business Day.  Payment by the Administrative Agent to any
Lender shall be made by wire transfer, promptly following the Administrative
Agent’s receipt of funds for the account of such Lender and in the type of
funds received by the Administrative Agent, provided
that if the Administrative Agent receives such funds at or prior to 1:00 p.m.,
the Administrative Agent shall pay such funds to such Lender by 2:00 p.m. on
such Business Day.  If a demand for
payment is made after the applicable time set forth above, the payment due
shall be made by 2:00 p.m. on the first Business Day following the date of
such demand.


 


(B)           If a Lender shall,
at any time, fail to make any payment to the Administrative Agent required
hereunder, the Administrative Agent may, but shall not be required to, retain
payments that would otherwise be made to such Lender hereunder and apply such
payments to such Lender’s defaulted obligations hereunder, at such time, and in
such order, as the Administrative Agent may elect in its sole discretion.


 


(C)           With respect to the
payment of any funds under this Section
4.8(b), whether from the Administrative Agent to a Lender or from a
Lender to the Administrative Agent, the party failing to make full payment when
due pursuant to the terms hereof shall, upon demand by the other party, pay
such amount together with interest on such amount at the Federal Funds
Effective Rate.


 


(c)           Settlement of Other Secured
Obligations.  All other amounts
received by the Administrative Agent on account of, or applied by the
Administrative Agent to the payment of, any Secured Obligation owed to the
Lenders (including, without limitation, fees payable to the Lenders pursuant to
Sections 4.2(a), (c) and (d) and proceeds from the sale of, or other
realization upon, all or any part of the Collateral following an Event of
Default) that are received by the Administrative Agent at or prior to 1:00 p.m.
on a Business Day will be paid by the


 


49

















 


Administrative Agent to each
Lender on the same Business Day, and any such amounts that are received by the
Administrative Agent after 1:00 p.m. will be paid by the Administrative Agent
to each Lender on the following Business Day, except, that fees payable in
respect of commercial or documentary Letters of Credit upon issuance thereof
pursuant to Section 4.2(d)(i)(A) shall be paid by the Administrative Agent
to the Lenders Ratably, payable monthly in arrears on each Interest Payment
Date.  Unless otherwise stated herein,
the Administrative Agent shall distribute to each Lender such Lender’s share of
fees payable to the Lenders pursuant to Section 4.2(c) based on such Lender’s
unused Commitment, and such Lender’s Proportionate Share of fees payable to the
Lenders pursuant to Sections 4.2(a) and (d) and shall distribute to
each Lender such Lender’s Proportionate Share (or if different, such Lender’s
share based upon the amount of the Secured Obligations then owing to each
Lender) of the proceeds from the sale of, or other realization upon, all or any
part of the Collateral following an Event of Default.


 


(d)           Allocation of Payments from
Borrower.  All monies to be applied
to the Secured Obligations, whether such monies represent voluntary payments by
the Borrower or are received pursuant to demand for payment or realized from
any disposition of Collateral, shall be allocated among the Administrative
Agent and such of the Lenders and other holders of the Secured Obligations as
are entitled thereto (and, with respect to monies allocated to the Lenders, on
a Ratable basis unless otherwise provided in this Section 4.8(d)):  (i)
first, to Bank of America to pay principal and accrued interest on any portion
of any Non-Ratable Loan which Bank of America may have advanced and for which
Bank of America has not been reimbursed by a Lender or the Borrower; (ii)
second, to the Administrative Agent to pay the amount of expenses that have not
been reimbursed to the Administrative Agent by the Borrower or the Lenders,
together with interest accrued thereon; (iii) third, to the Administrative
Agent to pay any indemnified amount that has not been paid to the
Administrative Agent by the Borrower or the Lenders, together with interest
accrued thereon (iv) fourth, to the Lenders for any indemnified amount that
they have paid to the Administrative Agent and for any expense that they have
reimbursed to the Administrative Agent, together with interest accrued thereon,
(v) fifth, to the Administrative Agent to pay any fees due and payable to the
Administrative Agent under this Agreement, (vi) sixth, to the Lenders to pay
any fees due and payable to the Lenders under this Agreement, (vii) seventh, to
the Lenders in payment of (A) the unpaid principal and accrued interest in
respect of the Loans and (B) reimbursement and other obligations arising under
Letter of Credit Documents or otherwise relating to Letters of Credit, to be
shared among the Lenders on a Ratable basis or on such other basis as may be
agreed upon in writing by all of the Lenders (which agreement or agreements may
be entered into without notice to or the consent or approval of the Borrower);
(viii) eighth, to cash collateralize Letters of Credit to the extent required,
pursuant to Section 3.9
hereof; (ix) ninth, the applicable Lenders in payment of any other Secured
Obligations including any amounts relating to Bank Products then outstanding
and held by any Lender on a pro rata basis
according to such other Secured Obligations then owing to such Lender expressed
as a percentage of such other Secured Obligations then owing to all Lenders or
on such other basis as may be agreed upon in writing by all of the Lenders
affected by the application of this clause (vii)
(which agreement or agreements may be entered into without notice to or the
consent or approval of the Borrower); and (ix) tenth, to the holders of the
Secured Obligations who are not Lenders on a pro rata basis.  The allocations set forth in this Section 4.8(d) are solely to determine the
rights and priorities of the Administrative Agent and the Lenders as among
themselves and may be changed by the Administrative Agent and the Lenders
without notice to or the consent or approval of the Borrower or any other
Person.  Whenever allocation is made
pursuant to this Section 4.8(d) to
the holder of Secured Obligations


 


50

















 


in which
another Lender acquires a participation, the monies received by such holder
shall be shared as between such holder and such participants on a Ratable
basis.


 


Section 4.9             Prepayment
Fee.  If the Borrower prepays the
Loans in whole and terminates this Agreement prior to the Termination Date, the
Borrower shall pay to the Administrative Agent for the Ratable benefit of the
Lenders on such date of termination, as liquidated damages and compensation for
the costs of making funds available to the Borrower under this Agreement and
not as a penalty, an amount equal to 1% of the amount of the Revolving Credit
Facility on the Effective Date, provided that
if such repayment occurs after the Administrative Agent has declared the
Secured Obligations to be immediately due and payable pursuant to Section 12.2, the amount of such fee shall be 1⁄2 of 1%
of the amount of the Revolving Credit Facility on the Effective Date.


 


Section 4.10           Payments
Not at End of Interest Period; Failure to Borrow.  If for any reason any payment of principal with respect to any
LIBOR Rate Loan is made on any day prior to the last day of the Interest Period
applicable to such LIBOR Rate Loan or, after having given a Notice of Borrowing
with respect to any LIBOR Rate Loan or a Notice of Conversion or Continuation
with respect to any Loan to be continued as or converted into a LIBOR Rate
Loan, such Loan is not made or is not continued as or converted into a LIBOR
Rate Loan due to the Borrower’s failure to borrow or to fulfill the applicable
conditions set forth in Article 5,
the Borrower shall pay to each Lender upon the request of the Administrative
Agent or such Lender, in addition to any amounts that may be due under Section 4.9, an amount (if a positive number)
computed pursuant to the following formula:


 


	
  L

  	
   

  	
  =

  	
   

  	
  (R - T) x P x D

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  360

  
	
  L

  	
   

  	
  =

  	
   

  	
  amount payable

  
	
  R

  	
   

  	
  =

  	
   

  	
  interest rate applicable to the LIBOR Rate Loan not borrowed,
  continued or converted, or prepaid

  
	
  T

  	
   

  	
  =

  	
   

  	
  effective interest rate per annum at which any readily marketable
  bonds or other obligations of the United States, selected at the
  Administrative Agent’s sole discretion, maturing on or near the last day of
  the then applicable or requested Interest Period for such Loan and in
  approximately the same amount as such Loan, can be purchased by such Lender
  on the day of such payment of principal or failure to borrow, continue or
  convert

  
	
  P

  	
   

  	
  =

  	
   

  	
  the amount of principal paid or the amount of the Loan requested or
  to have been continued or converted

  
	
  D

  	
   

  	
  =

  	
   

  	
  the number of days remaining in the Interest Period as of the date of
  such payment or the number of days in the requested Interest Period

  



 


The Borrower shall pay
such amount upon presentation by the Administrative Agent (or as to any Lender,
by such Lender) of a statement setting forth the amount and the Administrative
Agent’s (or such Lender’s) calculation thereof pursuant hereto, which statement
shall be deemed true and correct absent manifest error.


 


51

















 


Section 4.11           Assumptions
Concerning Funding of LIBOR Rate Loans. 
Calculation of all amounts payable to the Lenders under this Article 4 shall be made as though each
Lender had actually funded or committed to fund its LIBOR Rate Loans through
the purchase of an underlying deposit in an amount equal to the amount of such
ratable share and having a maturity comparable to the relevant Interest Period
for such LIBOR Rate Loan; provided,
however, each Lender may fund its
LIBOR Rate Loans in any manner it deems fit and the foregoing assumption shall
be utilized only for the calculation of amounts payable under this Article 4.


 


Section 4.12           Notice
of Conversion or Continuation. 
Whenever the Borrower desires, subject to the provisions of Section 4.15, to convert an outstanding
Loan into a Loan or Loans of a different Type or to continue all or a portion
of an outstanding LIBOR Rate Loan for a subsequent Interest Period, the
Borrower shall notify the Administrative Agent by telephone or in writing
(which notice shall be irrevocable) not later than 11:00 a.m. (London
time) on the date two Business Days before the day on which such proposed
conversion or continuation is to be effective (and such effective date of any
continuation shall be the last day of the Interest Period for the applicable
LIBOR Rate Loan).  Each such notice (a Notice of Conversion or Continuation)
shall (i) identify the Loan to be converted or continued, the aggregate
outstanding principal balance thereof and, if a LIBOR Rate Loan, the last day
of the Interest Period applicable to such Loan, (ii) specify the effective
date of such conversion or continuation, (iii) specify the principal amount of
such Loan to be converted or continued and, if converted, the Type or Types
into which the same is to be converted, and (iv) the Interest Period to be
applicable to the LIBOR Rate Loan as converted or continued, and shall, if
notice thereof was originally given by telephone, be immediately followed by a
signed, written confirmation thereof by the Borrower in a form acceptable to
the Administrative Agent, provided that
if such written confirmation differs in any respect from the action taken by
the Lenders, the records of the Administrative Agent shall control absent
manifest error.


 


Section 4.13           Conversion
or Continuation.  Provided that no
Event of Default shall have occurred and be continuing (but subject to the
provisions of Sections 4.12 and 4.15), the Borrower may request that all or
any part of any outstanding Loan be converted into a Loan or Loans of a different
Type or be continued as a Loan or Loans of the same Type, in the same aggregate
principal amount, on any Business Day (which, in the case of continuation of a
LIBOR Rate Loan, shall be the last day of the Interest Period applicable to
such Loan), upon notice (which notice shall be irrevocable) given in accordance
with Section 4.12.


 


Section 4.14           Duration
of Interest Periods; Maximum Number of LIBOR Rate Loans; Minimum Increments.


 


(a)           Subject to the provisions of the
definition “Interest Period,” the duration of each Interest Period applicable
to a LIBOR Rate Loan shall be as specified in the applicable Notice of
Borrowing or Notice of Conversion or Continuation.  The Borrower may elect a subsequent Interest Period to be
applicable to any LIBOR Rate Loan by giving a Notice of Conversion or
Continuation with respect to such Loan in accordance with Section 4.12.


 


(b)           If the Administrative Agent does not
receive a notice of election in accordance with Section 4.12 with respect to the continuation of any LIBOR
Rate Loan within the applicable time limits specified in said Section 4.12, or if, when such notice must
be given,


 


52

















 


an Event of
Default exists or such Type of Loan is not available, the Borrower shall be
deemed to have elected to convert such LIBOR Rate Loan in whole into a Base
Rate Loan on the last day of the Interest Period therefor.


 


(c)           Notwithstanding the foregoing, the
Borrower may not select an Interest Period that would end, but for the provisions
of the definition “Interest Period,” after the Termination Date.


 


(d)           In no event shall there be more than
six LIBOR Rate Loans outstanding hereunder at any time.  For the purpose of this subsection (d), each LIBOR Rate Loan having
a distinct Interest Period shall be deemed to be a separate Loan hereunder.


 


(e)           Each LIBOR Rate Loan shall be in a
minimum amount of $1,000,000 or an integral multiple of $250,000 in excess
thereof.


 


Section 4.15           Changed
Circumstances.


 


(a)           If the introduction of or any change
in or in the interpretation of (in each case, after the date hereof) any law or
regulation makes it unlawful, or any Governmental Authority asserts, after the
date hereof, that it is unlawful, for any Lender to perform its obligations
hereunder to make LIBOR Rate Loans or to fund or maintain LIBOR Rate Loans
hereunder, such Lender shall notify the Administrative Agent of such event and
the Administrative Agent shall notify the Borrower of such event, and the right
of the Borrower to select LIBOR Rate Loan for any subsequent Interest Period or
in connection with any subsequent conversion of any Loan shall be suspended
until the Administrative Agent shall notify the Borrower that the circumstances
causing such suspension no longer exist, and the Borrower shall forthwith
prepay in full all LIBOR Rate Loans then outstanding and shall pay all interest
accrued thereon through the date of such prepayment or conversion, unless the
Borrower, within three Business Days after such notice from the Administrative Agent,
requests the conversion of all LIBOR Rate Loans then outstanding into Base Rate
Loans; provided, that if the date
of such repayment or proposed conversion is not the last day of the Interest
Period applicable to such LIBOR Rate Loan, the Borrower shall also pay any
amount due pursuant to Section 4.10.


 


(b)           If the Administrative Agent shall, at
least one Business Day before the date of any requested Revolving Credit Loan
or the effective date of any conversion or continuation of an existing Loan to
be made or continued as or converted into a LIBOR Rate Loan (each such
requested Revolving Credit Loan made and Loan to be converted or continued, a Pending Loan), notify the Borrower that the LIBOR Rate
will not adequately reflect the cost to the Lenders of making or funding such
Pending Loan as a LIBOR Rate Loan or that the Interbank Offered Rate is not
reasonably determinable, including from any interest rate reporting service of
recognized standing, then the right of the Borrower to select LIBOR Rate Loans
for such Pending Loan, any subsequent Revolving Credit Loan or in connection
with any subsequent conversion or continuation of any Loan shall be suspended
until the Administrative Agent shall notify the Borrower that the circumstances
causing such suspension no longer exist, and each Pending Loan and each such
subsequent Loan requested to be made, continued or converted shall be made or
continued as or converted into a Base Rate Loan.


 


53

















 


(c)           If, due to either (i) the
introduction of or any change (other than any change by way of imposition or
increase of reserve requirements included in the LIBOR Reserve Percentage) in
or in the interpretation of, in each case after the date hereof, any law or
regulation (except to the extent such introduction, change or interpretation
affects taxes measured by net income), or (ii) the compliance with any
guideline or request (except to the extent such guideline or request affects
taxes measured by net income) from any central bank or other governmental
authority (whether or not having the force of law) made after the date hereof,
there shall be any increase in the cost to any Lender of agreeing to make or
making, funding or maintaining LIBOR Rate Loans (other than as separately
provided for in Section 4.15(d)),
then the Borrower shall from time to time, within 30 days after demand by such
Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost.


 


(d)           If (i) the adoption of or change in,
after the date hereof, any law, rule, regulation or guideline regarding capital
requirements for banks or bank holding companies, or any change, after the date
hereof, in the interpretation or application thereof by any governmental
authority charged with the interpretation or administration thereof, or (ii)
compliance by such Lender with any guideline, request or directive of any such
entity regarding capital adequacy (whether or not having the force of law), has
the effect of reducing the return on a Lender’s capital as a consequence of its
maintaining its Loans or Letter of Credit Obligations, or commitment to make
Revolving Credit Loans hereunder to a level below that which such Lender could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender’s policies with respect to capital adequacy
immediately before such adoption, change or compliance and assuming the full
utilization of such Lender’s capital immediately before such adoption, change
or compliance) or if any change in law, regulation, treaty or official
directive or the interpretation or application thereof by any court or by any
governmental authority charged with the administration thereof or the
compliance with any guideline or request of any central bank or other
governmental authority (whether or not having the force of law) subjects a
Lender to any tax with respect to payments of principal or interest or any
other amounts payable hereunder by the Borrower or otherwise with respect to
the transactions contemplated hereby (except for taxes on the overall net
income of such Lender imposed by the United States of America or any political
subdivision thereof), in each case by any amount deemed by such Lender to be
material, then such Lender shall promptly after its determination of such
occurrence notify the Borrower and the Administrative Agent thereof.  The Borrower agree to pay to the Administrative
Agent, for the account of such Lender, as an additional fee from time to time,
within 30 days after demand by such Lender, such amount as such Lender
certifies to be the amount that will compensate it for such reduction.


 


(e)           Before giving any notice pursuant to Section 4.15(a) or making any demand
pursuant to Section 4.15(c) or (d), each Lender agrees to use its best
efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different lending office if the making of such a
designation would avoid the need for such notice or demand, or reduce the
amount of such increased cost or reduction in return and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.


 


(f)            A certificate of a Lender claiming
compensation under Section 4.15(c)
or (d) shall be conclusive in the
absence of manifest error.  Such
certificate shall set forth the nature of the occurrence giving rise to such
compensation, the additional amount or amounts to be paid


 


54

















 


to it
hereunder and the method by which such amounts were determined.  In determining such amount, a Lender may use
any reasonable averaging and attribution methods.


 


Section 4.16           Cash
Collateral Account.


 


(a)           Cash Collateral Account.  The Borrower shall establish a Cash
Collateral Account in which to deposit Collateral consisting of cash or Cash
Equivalents from time to time,


 


(i)            representing
payments received pursuant to Section 2.3(b)
or (c) or Section 4.15
in excess of then outstanding Revolving Credit Loans or on account of LIBOR
Rate Loans which would otherwise result in repayment of such Loans prior to the
end of the Interest Period applicable thereto,


 


(ii)           with respect to
Letter of Credit Obligations (x) at the request of the Administrative Agent
upon the occurrence of an Event of Default, or (y) for the purposes set forth
in Section 4.6 in the event
of termination of this Agreement, or


 


(iii)          for any other
purpose appropriate under this Agreement to provide security for the Secured
Obligations.


 


On
the last day of the applicable Interest Period as to any amounts deposited to
the Cash Collateral Account pursuant to clause (i) above or if a drawing under
a Letter of Credit occurs with respect to any amounts deposited to the Cash
Collateral Account pursuant to clause (ii) above, Borrower hereby
authorizes the Administrative Agent to use the monies deposited in the Cash
Collateral Account to make payment to the payee with respect to such Loan or
drawing.  The Cash Collateral Account
shall be in the name of the Administrative Agent and the Administrative Agent
shall have sole dominion and control over, and sole access to, the Cash
Collateral Account.  Neither the
Borrower nor any Person claiming on behalf of or through the Borrower shall
have any right to withdraw any of the funds held in the Cash Collateral
Account.  The Borrower agrees that it
will not at any time (x) sell or otherwise dispose of any interest in the Cash
Collateral Account or any funds held therein or (y) create or permit to exist
any Lien upon or with respect to the Cash Collateral Account or any funds held
therein, except as provided in or contemplated by this Agreement.  The Administrative Agent shall exercise
reasonable care in the custody and preservation of any funds held in the Cash
Collateral Account and shall be deemed to have exercised such care if such
funds are accorded treatment substantially equivalent to that which the
Administrative Agent accords other funds deposited with the Administrative
Agent, it being understood that the Administrative Agent shall not have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any funds held in the Cash Collateral Account.  Subject to the right of the Administrative
Agent to withdraw funds from the Cash Collateral Account as provided herein,
the Administrative Agent will, so long as no Default or Event of Default shall
have occurred and be continuing, from time to time invest funds on deposit in
the Cash Collateral Account, reinvest proceeds of any such investments which
may mature or be sold, and invest interest or other income received from any
such investments, in each case, in Cash Equivalents, as the Borrower may direct
prior to the occurrence of a Default or Event of Default and as the
Administrative Agent may select after the occurrence and during the continuance
of a Default or Event of Default.  Such
proceeds, interest and income which are not so invested or reinvested in Cash
Equivalents shall be deposited and held by the Administrative Agent in the Cash
Collateral


 


55

















 


Account.  The Administrative Agent makes no
representation or warranty as to, and shall not be responsible for, the rate of
return, if any, earned in any Cash Collateral. 
Any earnings on Cash Collateral shall be held as additional Cash
Collateral on the terms set forth in this Section 4.16.


 


Section 4.17           Funds
Transfer Services.


 


(a)           The Borrower acknowledges that the
Administrative Agent has made available to it as Annex B hereto a description of security procedures regarding
funds transfers executed by Bank of America or an Affiliated bank at the
request of the Borrower (the Security Procedures).  The Borrower and the Administrative Agent
agree that the Security Procedures are commercially reasonable.  The Borrower further acknowledges that the
full scope of the Security Procedures which Bank of America and its Affiliated
banks offer and strongly recommend for funds transfers is available only if the
Borrower communicates directly with Bank of America or such Affiliated bank as
applicable in accordance with said procedures. 
If the Borrower attempts to communicate by any other method or otherwise
not in accordance with the Security Procedures, Bank of America or such
Affiliated bank, as applicable, shall not be required to execute such
instructions, but if Bank of America or such Affiliated bank, as applicable,
does so, the Borrower will be deemed to have refused the Security Procedures
that Bank of America and its Affiliated banks offer and strongly recommend, and
the Borrower will be bound by any funds transfer, whether or not authorized,
which is issued in the name of the Borrower and accepted by Bank of America or
such Affiliated bank, as applicable, in good faith.  Bank of America or any Affiliated bank, as applicable, may modify
the Security Procedures at such time or times and in such manner as Bank of
America or such Affiliated bank, as applicable, in its sole discretion, deems
appropriate to meet prevailing standards of good banking practice.  By continuing to use Bank of America’s or
such Affiliated bank’s, as applicable, wire transfer services after receipt of
any modification of the Security Procedures, the Borrower agrees that the
Security Procedures, as modified, are likewise commercially reasonable.  The Borrower further agrees to establish and
maintain procedures to safeguard the Security Procedures and any information
related thereto.


 


(b)           Bank of America and its Affiliated
banks will generally use the Fedwire funds transfer system for domestic funds
transfers, and the funds transfer system operated by the Society for Worldwide
International Financial Telecommunication (SWIFT) for international funds
transfers.  International funds
transfers may also be initiated through the Clearing House InterBank Payment
System (CHIPs) or international cable. 
However, Bank of America or any of its Affiliated banks may use any
means and routes that Bank of America or such Affiliated bank, as applicable,
in its sole discretion, may consider suitable for the transmission of
funds.  Each payment order, or
cancellation thereof, carried out through a funds transfer system or a clearinghouse
will be governed by all applicable funds transfer system rules and clearing
house rules and clearing arrangements, whether or not Bank of America or such
Affiliated bank, as applicable, is a member of the system, clearinghouse or
arrangement and the Borrower acknowledges that Bank of America’s or such
Affiliated bank’s, as applicable, right to reverse, adjust, stop payment or
delay posting of an executed payment order is subject to the laws, regulations,
rules, circulars and arrangements described herein.


 


Section 4.18           Bank
Products.  The Borrower may request
and the Administrative Agent may, in its sole and absolute discretion, arrange
for the Borrower to obtain from any Lender or the Affiliates of any Lender Bank
Products, although the Borrower is not required to do so.  If Bank Products are provided by an
Affiliate of any Lender, the Borrower agrees to


 


56

















 


indemnify and
hold the Administrative Agent and the Lenders harmless from any and all costs
and obligations now or hereafter incurred by the Administrative Agent or any of
the Lenders which arise from any indemnity given by the Administrative Agent or
any Lender to its Affiliates related to such Bank Products; provided however, nothing contained herein is intended to
limit the Borrower’s rights, with respect to any Lender or its Affiliates, if
any, which arise as a result of the execution of documents by and between the
Borrower and such Lender or Affiliate which relate to Bank Products.  The agreement contained in this Section 4.18 shall survive termination of this
Agreement.  The Borrower acknowledges
and agrees that the obtaining of Bank Products from a Lender or the Affiliates
of a Lender (a) is in the sole and absolute discretion of such Lender or the
Affiliates of such Lender, and (b) is subject to all rules and regulations of
such Lender or the Affiliates of such Lender.


 


ARTICLE 5


 


CONDITIONS PRECEDENT


 


Section 5.1             Conditions
Precedent to Effectiveness. 
Notwithstanding any other provision of this Agreement, the effectiveness
of this Agreement is subject to the satisfaction of each of the following
conditions, prior to or contemporaneously with the making of the Effective Date
Loans:


 


(a)           Closing Documents.  The Administrative Agent shall have received
each of the following (in sufficient copies, other than the Notes, for all
Lenders), all of which shall be satisfactory in form and substance to the
Administrative Agent and its special counsel:


 


(1)           This Agreement, duly
executed and delivered by the Borrower.


 


(2)           The Revolving Credit
Notes to the order of each Lender, duly executed and delivered by the Borrower.


 


(3)           The Consent and
Confirmation of Guarantor duly executed and delivered by Rauch.


 


(4)           Certified copies of
the articles of incorporation and by-laws of the Borrower and Rauch as in
effect on the Effective Date.


 


(5)           Certified copies of
all corporate action and shareholder action, if necessary, taken by the
Borrower and Rauch or their shareholders, as the case may be, to authorize the
execution, delivery and performance of this Agreement and the Loan Documents to
which it is a party and the borrowings under this Agreement.


 


(6)           Certificates of
incumbency and specimen signatures with respect to each of the officers of the
Borrower and Rauch authorized to execute and deliver this Agreement and the
Loan Documents on its behalf or any certificate or instrument to be delivered
in connection with this Agreement or to request borrowings under this
Agreement.


 


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(7)           A signed opinion of
Weil, Gotshal & Manges LLP, special counsel for the Borrower and Rauch, as
to such matters in connection with this Agreement and the Loan Documents as any
Lender through the Administrative Agent, may reasonably request.


 


(8)           True, correct and
complete copies, certified to the satisfaction of the Administrative Agent, of
the Merger Documents and evidence satisfactory to the Administrative Agent of
the consummation of the Mergers.


 


(9)           A Certificate of the
Chief Financial Officer stating that, to the best of his knowledge and based on
an examination sufficient to enable him to make an informed statement,


 


(A)          all of the
representations and warranties made or deemed to be made under this Agreement
are true and correct as of the Effective Date, both with and without giving
effect to the Initial Loans and the application of the proceeds thereof, and


 


(B)           no Default or Event
of Default exists, and the Administrative Agent shall be satisfied as to the
accuracy thereof.


 


(10)         A certification from
the Principal Officers of the Borrowers as to such factual matters as shall be
required by the Administrative Agent.


 


(11)         Such other documents
and instruments as the Agent, or any Lender, may reasonably request.


 


(b)           Fees.  The Borrower shall have paid all of the fees
payable on the Effective Date to the Administrative Agent or any Lender
referred to herein or provided for in the separate letter dated March 24, 2004
to which the Administrative Agent is a party.


 


(c)           Security Interests.  The Administrative Agent shall have received
satisfactory evidence that the Administrative Agent (for the benefit of the
Lenders) has a valid and perfected first priority Lien as of such date in all
of the Collateral, subject only to Permitted Liens.


 


(d)           Materially Adverse Effect.  The Lenders and the Administrative Agent
shall be satisfied that no Materially Adverse Effect has occurred since
December 31, 2003.


 


Section 5.2             Conditions
to All Loans, Letters of Credit. 
The Lenders’ obligations to make any Loan, and Bank of America’s
obligation to issue any Letter of Credit shall be subject to satisfaction of
the following additional conditions:


 


(a)           all of the representations and
warranties made or deemed to be made under this Agreement shall be true and
correct at such time in all material respects, both with and without giving
effect to the Loans to be made at such time and the application of the proceeds
thereof or the issuance of such Letter of Credit, and


 


(b)           the corporate actions of the Borrower
referred to in Section 5.1(a)(4)
shall remain in full force and effect and the incumbency of officers shall be
as stated in the certificates


 


58

















 


of incumbency
delivered pursuant to Section 5.1(a)(5)
or as subsequently modified and reflected in a certificate of incumbency
delivered to the Administrative Agent.


 


Each
request or deemed request for any borrowing hereunder shall be deemed to be a
certification by the Borrower to the Administrative Agent and the Lenders as to
the matters set forth in Section 5.2(a) and (b) and the Administrative
Agent may, without waiving either condition, consider the conditions specified
in Sections
5.2(a) and (b) fulfilled and a representation by the
Borrower to such effect made, if no written notice to the contrary is received
by the Administrative Agent prior to the making of the Loan then to be made.


 


Section 5.3             Effect
of Effectiveness.  Upon the
effectiveness of this Agreement in accordance with Section 5.1,
the Existing Default shall automatically and without further action be deemed
waived and the Revolving Credit Loans made to the Borrower under Section 2.1 of the Existing Loan Agreement and
outstanding on the Effective Date shall continue for all purposes as Revolving
Credit Loans hereunder, and all Letters of Credit and Bankers Acceptances
issued under Article 3 of the Existing
Loan Agreement and outstanding on the date of such effectiveness shall continue
for all purposes as Letter of Credit and Bankers Acceptances hereunder; all
references to the “Loan Agreement” in any Loan Document executed and delivered
prior to the Effective Date shall mean and be referenced to the Existing Loan
Agreement as amended and restated in its entirety by this Agreement.


 


ARTICLE 6


 


REPRESENTATIONS AND WARRANTIES OF THE
BORROWER


 


Section 6.1             Representations
and Warranties.  The Borrower
represents and warrants to the Administrative Agent and the Lenders as follows:


 


(a)           Organization; Power; Qualification.  The Borrower and each of its Subsidiaries is
a corporation, duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, has the power and authority to
own its properties and to carry on its business as now being and proposed to be
conducted hereafter and is duly qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization, except for jurisdictions
where the failure to be so qualified or authorized will not have a Materially
Adverse Effect.


 


(b)           Subsidiaries.  Schedule
6.1(b) correctly sets forth the name of each Subsidiary of the
Borrower, its jurisdiction of incorporation, the name of its immediate parent
or parents, and the percentage of its issued and outstanding securities owned
by the Borrower or any other Subsidiary of the Borrower and indicating whether
such Subsidiary is a Consolidated Subsidiary. 
Except as set forth on Schedule 6.1(b),


 


(i)            no Subsidiary has
issued any securities convertible into shares of such Subsidiary’s capital
stock or any options, warrants or other rights to acquire any shares or
securities convertible into such shares,


 


59

















 


(ii)           the outstanding
stock and securities of each such Subsidiary are owned by the Borrower or a
wholly owned Subsidiary of the Borrower or as otherwise indicated on Schedule 6.1(b), or by the Borrower and one
or more of its wholly owned Subsidiaries, free and clear of all Liens,
warrants, options and rights of others of any kind whatsoever, and


 


(iii)          the Borrower has no
Subsidiaries.


 


The
outstanding stock of the Borrower and each of its Subsidiaries has been duly
and validly issued and is fully paid and nonassessable by the issuer.


 


(c)           Authorization of Agreement and Loan
Documents.  The Borrower and each of
its Subsidiaries has the right and power, and has taken all necessary action to
authorize it, to execute, deliver and perform this Agreement and each of the
Loan Documents to which it is a party in accordance with their respective
terms.  This Agreement and each of the
Loan Documents to which it is a party have been, or will be, duly executed and
delivered by a duly Authorized Officer of the Borrower and each Subsidiary
party thereto and each is, or when executed and delivered will be, a legal,
valid and binding obligation of the Borrower and each Subsidiary party thereto,
enforceable in accordance with its terms.


 


(d)           Compliance with Law; Governmental
Approvals.


 


(i)            Except as set forth
in Schedule 6.1(d), each of the Borrower
and its Subsidiaries


 


(A)          has all Governmental
Approvals, including permits relating to federal, state and local Environmental
Laws, ordinances and regulations required by any Applicable Law for it to
conduct its business, each of which is in full force and effect, is final and
not subject to review on appeal and is not the subject of any pending or, to
the knowledge of the Borrower, threatened attack by direct or collateral
proceeding,


 


(B)           is in compliance
with each Governmental Approval applicable to it and in compliance with all
other Applicable Laws relating to it, including, without being limited to, all
Environmental Laws and all occupational health and safety laws applicable to
the Borrower or its Subsidiaries or their respective properties, and


 


(C)           may execute, deliver
and perform its obligations under the Loan Documents to which it is a party,
without conflict with, a breach of or default under any material provisions of
any indenture, agreement or other instrument to which the Borrower or any of
its Subsidiaries is a party or by which the Borrower, any of its Subsidiaries
or any of its or their property may be bound,


 


except for instances of noncompliance which would not, singly or in the
aggregate, cause a Default or Event of Default or have a Materially Adverse
Effect and in respect of which adequate reserves have been established on the
books of the Borrower or such Subsidiary.


 


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(ii)           Without limiting
the generality of the above, except with respect to matters which could not
reasonably be expected to have in the aggregate a Materially Adverse Effect and
except as disclosed by the Borrower to the Lenders prior to the Agreement Date,
to the knowledge of the Borrower:


 


(A)          Neither the Borrower
nor its Subsidiaries nor any of their present property or operations, nor their
past property or operations, are subject to any order from or agreement with
any public authority or private party respecting (x) any environmental, health
or safety requirements of Applicable Law, (y) any Remedial Action, or (z) any
liabilities or costs arising from the Release or threatened Release of a
Contaminant into the environment;


 


(B)           None of the
operations of the Borrower or any Subsidiary is subject to any judicial or
administrative proceeding alleging a violation of any environmental, health or
safety requirement of Applicable Law;


 


(C)           None of the present
nor past operations of the Borrower or any Subsidiary is the subject of any
investigation by any public authority evaluating whether any Remedial Action is
needed to respond to a Release or threatened Release of a Contaminant into the
environment;


 


(D)          Neither the Borrower
nor any Subsidiary has filed any notice under any requirement of Applicable Law
indicating past or present treatment, storage or disposal of a hazardous waste,
as that term is defined under 40 CFR Part 261 or any state equivalent;


 


(E)           Neither the Borrower
nor any Subsidiary has filed any notice under any requirement of Applicable Law
reporting a Release of a Contaminant into the environment;


 


(F)           Except in compliance
in all material respects with applicable Environmental Laws, during the course
of the Borrower’s operations on the Real Estate, there have been no (w)
generation, treatment, recycling, storage or disposal of hazardous waste, as
that term is defined under 40 CFR Part 261 or any state equivalent, (x) use of
underground storage tanks or surface impoundments, (y) use of
asbestos-containing materials, or (z) use of polychlorinated biphenyls (PCB)
used in hydraulic oils, electrical transformers or other equipment;


 


(G)           Neither the Borrower
nor any Subsidiary has received any notice or claim to the effect that it is or
may be liable to any Person as a result of the Release or threatened Release of
a Contaminant into the environment;


 


(H)          The presence and
condition of all asbestos-containing material which is on or part of the Real
Estate (excluding any raw materials used in the manufacture of products or
products themselves) do not violate in any material respect any currently
applicable requirement of Applicable Law; and


 


61

















 


(I)            Neither the
Borrower nor any Subsidiary has manufactured, distributed or sold, nor has it
ever manufactured, distributed or sold, products which contain
asbestos-containing material; and


 


(iii)          The Borrower and
its Subsidiaries have notified the Lenders of their receipt of any notice of a
material violation of any Environmental Laws and occupational health and safety
laws applicable to such Borrower or Subsidiary or their respective properties.


 


(e)           Business.  The business of the Borrower and each of its
Subsidiaries is as described on Schedule
6.1(e).


 


(f)            Titles to Properties.  Except as set forth in Schedule 6.l(f), each of the Borrower and
its Subsidiaries has good, marketable and legal title to, or a valid leasehold
interest in, its real properties and valid and legal title to all personal
property and assets, including, but not limited to, those reflected on the Consolidated
balance sheet of Syratech and its Consolidated Subsidiaries delivered pursuant
to Section 6.1(m), except those
which have been disposed of subsequent to such date in the ordinary course of
business.


 


(g)           Liens.  Except as set forth on Schedule 6.1(g), none of the properties and
assets of the Borrower or any of its Subsidiaries is subject to any Lien,
except Permitted Liens.  No financing
statement under the Uniform Commercial Code of any State which names the Borrower
or any Subsidiary as debtor has been filed in any State or other jurisdiction
and neither the Borrower nor any Subsidiary has signed any such financing
statement or any security agreement authorizing any secured party thereunder to
file any such financing statement, any of which financing statements or
security agreements remain in effect and unterminated after the Effective Date,
except to perfect or protect Permitted Liens.


 


(h)           Debt and Guaranties.  Schedule
6.1(h) is a complete and correct listing of all (i) Debt and (ii)
Guaranties of the Borrower and each of its Subsidiaries as of the Effective
Date.  Each of the Borrower and the
Subsidiaries has performed and is in compliance with all of the terms of such
Debt and Guaranties and all instruments and agreements relating thereto, and no
default or event of default, or event or condition which with notice or lapse
of time or both would constitute such a default or event of default, exists
with respect to any such Debt or Guaranty.


 


(i)            Litigation.  Except as set forth on Schedule 6.1(i), there are no actions,
suits or proceedings pending (nor, to the knowledge of the Borrower, are there
any actions, suits or proceedings threatened) against or in any other way
relating adversely to or affecting the Borrower or any of its Subsidiaries or
any of its or their property in any court or before any arbitrator of any kind
or before or by any governmental body except actions, suits or proceedings of
the character normally incident to the kind of business conducted by the
Borrower or Subsidiary, as the case may be, which, if adversely determined,
would not in the aggregate have a Materially Adverse Effect, and there are no
strikes or walkouts in progress relating to any labor contracts to which the
Borrower or any of its Subsidiaries is a party.


 


(j)            Proprietary Rights.  Schedule
6.1(j) sets forth a correct and complete list of all of the
Proprietary Rights of the Borrower and each of its Subsidiaries.  None of the


 


62

















 


Proprietary
Rights is subject to any licensing agreement or similar arrangement except as
set forth on Schedule 6.1(j) or as
entered into in the sale or distribution of the Borrower’s or any Subsidiary’s
Inventory in the ordinary course of business. 
To the best of the Borrower’s knowledge, none of the Proprietary Rights
infringes on or conflicts with any other Person’s property, and no other
Person’s property infringes on or conflicts with the Proprietary Rights.  The Proprietary Rights described on Schedule 6.1(j) constitute all of the
material property of such type necessary to the current and continued conduct
of the Borrower’s and its Subsidiaries’ business as presently conducted.


 


(k)           Tax Returns and Payments.  All federal, state and other tax returns of
each of the Borrower and its Subsidiaries required by law to be filed have been
duly filed, and all federal, state and other taxes, assessments and other
governmental charges or levies upon the Borrower or its Subsidiaries and their
property, income, profits and assets which are due and payable have been paid,
except any such nonpayment which is at the time permitted under Section 9.7.  The charges, accruals and reserves on the books of each of the
Borrower and its Subsidiaries in respect of federal and state taxes are in the
judgment of the Borrower adequate, and the Borrower knows of no reason to
anticipate any additional assessments which, singly or in the aggregate, might
have a Materially Adverse Effect.


 


(l)            Burdensome Provisions.  Neither the Borrower nor any Subsidiary is a
party to any indenture, agreement, lease or other instrument, or subject to any
charter or corporate restriction, Governmental Approval or Applicable Law,
compliance with the terms of which might have a Materially Adverse Effect, nor
is the Borrower or any Subsidiary subject to any contractual restrictions which
limit the amount of dividends payable by any Subsidiary.


 


(m)          Financial Statements and
Projections.


 


(i)            The Borrower has
furnished to the Lenders copies of the unaudited consolidated balance sheet of
Syratech and its Consolidated Subsidiaries as at December 31, 2003 and the
related consolidated statements of earnings, cash flow and retained earnings
for the twelve-month period then ended. 
Such financial statements are complete and correct, and present fairly
in all material respects in accordance with GAAP the consolidated financial
position and results of operations of the Borrower and its Consolidated
Subsidiaries as of their date and for the fiscal year ended on such date.  Except as disclosed or reflected in such
financial statements as at such date, and except as disclosed in writing to the
Administrative Agent and the Lenders prior to the Effective Date, as of the
Effective Date neither the Borrower nor any Subsidiary has any material
liabilities, contingent or otherwise, and there were no material unrealized or
anticipated losses of the Borrower or any Subsidiary.


 


(ii)           The Borrower has
furnished the Projections to the Lenders. 
The opening balance sheet included in the Projections presents fairly
and accurately the Borrower’s consolidated financial condition as of the
Effective Date after giving effect to the Mergers.  The Projections represent the Borrower’s best estimate of its
future consolidated financial performance for the periods set forth therein,
and have been prepared on the basis of the assumptions set forth therein, which
assumptions the Borrower believes are reasonable in the light of current and
reasonably foreseeable business conditions.


 


63

















 


(n)           Adverse Change.  Since the date of the financial statements
described in Section 6.1(m)


 


(i)            no material adverse
change in the business, assets, liabilities, financial condition, results of
operations or business prospects of the Borrower and its Consolidated
Subsidiaries has occurred, and


 


(ii)           no event has
occurred or failed to occur which has had, or may have, a Materially Adverse
Effect.


 


(o)           ERISA.  Neither the Borrower nor any Related Company
maintains or contributes to any Benefit Plan other than those listed on Schedule 6.1(o).  Each such Benefit Plan is in substantial compliance with ERISA
and the Code, including but not limited to those provisions thereof relating to
reporting and disclosure, and neither the Borrower nor any Related Company has
received any notice asserting that a Benefit Plan is not in compliance with
ERISA.  No material liability to the
PBGC or to a Multiemployer Plan has been, or is expected to be, incurred by the
Borrower or any Related Company.  Each
Benefit Plan intended to qualify under Section 401(a) of the Code so
qualifies and any related trust is exempt from federal income tax under
Section 501(a) of the Code.  A
favorable determination letter from the IRS has been issued (or applied for)
with respect to each such plan and trust and nothing has occurred since the
date of any such determination letter issued, that would adversely affect such
qualification or tax-exempt status.  No
Benefit Plan subject to the minimum funding standards of the Code has failed to
meet such standards.  Neither the
Borrower nor any Related Company has transferred any pension plan liability in
a transaction that could be subject to Sections 4069 or 4212(c) of ERISA.  Neither the Borrower nor any Related Company
has any liability, direct or contingent, with respect to any Benefit Plan other
than to make payments to the Benefit Plan in accordance with its terms, and
there are no pending or threatened claims against any Benefit Plan.  No non-exempt prohibited transaction with
the meaning of Section 4975 of the Code or Section 406 of ERISA has
occurred with respect to a Benefit Plan. 
No employee or former employee of the Borrower or any Related Company is
or may become entitled to any benefit under a Benefit Plan that is a “welfare
plan” within the meaning of Section 3(1) of ERISA following such
employee’s termination of employment. 
Each such welfare plan that is a group health plan has been operated in
compliance with the provisions of Section 4980B of the Code and Sections
601-609 of ERISA and any applicable provisions of state law that are similar.


 


(p)           Absence of Defaults.  Neither the Borrower nor any Subsidiary is
in default under its certificate or articles of incorporation or by-laws and no
event has occurred, which has not been remedied, cured or waived,


 


(i)            which constitutes a
Default or an Event of Default, or


 


(ii)           which constitutes,
or which with the passage of time or giving of notice or both would constitute,
a default or event of default by the Borrower or any Subsidiary under any
material agreement (other than this Agreement) or judgment, decree or order to
which such Borrower or any Subsidiary is a party or by which the Borrower or
any Subsidiary or any of their respective properties may be bound, except, in
the case only of any such agreement, for alleged defaults which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been


 


64

















 


established on the books of the Borrower or such Subsidiary, as the
case may be, and except for defaults that have been disclosed and consented to
by the Administrative Agent and the Lenders, as appropriate.


 


(q)           Accuracy and Completeness of
Information.  All written
information, reports and other papers and data produced by or on behalf of the
Borrower and furnished to the Administrative Agent and the Lenders on or prior
to the Effective Date, were, at the time the same were so furnished, complete
and correct in all material respects, to the extent necessary to give the
recipient a true and accurate knowledge of the subject matter.  As of the Effective Date, no fact is known
to the Borrower which has had, or may in the future have (so far as such
Borrower can reasonably foresee), a Materially Adverse Effect, which has not
been set forth in the financial statements referred to in Section 6.1(m) or in such information,
reports or other papers or data or otherwise disclosed in writing to the
Administrative Agent and the Lenders prior to the Effective Date.  No document furnished or written statement
made to the Administrative Agent or the Lenders or prior to the Effective Date,
in connection with the negotiation, preparation or execution of this Agreement
or any of the Loan Documents contains any untrue statement of a fact material
to the creditworthiness of the Borrower or any Subsidiary or omits or will omit
to state a material fact necessary in order to make the statements contained
therein not misleading.


 


(r)            Solvency.  In each case after giving effect to the Debt
represented by the Loans outstanding and to be incurred and the transactions
contemplated by the Recapitalization and this Agreement, each of the Borrower
and its Subsidiaries is solvent, having assets of a fair salable value which
exceeds the amount required to pay its debts, and each of the Borrower and its
Subsidiaries is able to and anticipates that it will be able to meet its debts
as they mature and has adequate capital to conduct the business in which it is,
or proposes to be, engaged.


 


(s)           Federal Regulations.  Neither the Borrower nor any Subsidiary is
engaged or will engage, principally or as one of its important activities, in
the business of extending credit for the purpose of “purchasing” or “carrying”
any “margin stock” (as each of such terms is defined or used in Regulations G
and U of the Board of Governors of the Federal Reserve System).


 


(t)            Investment Company Act.  Neither the Borrower nor any Subsidiary
other than Syratech Securities Corporation, which is inactive, is an “investment
company” or a company “controlled” by an “investment company” (as each of such
terms is defined or used in the Investment Company Act of 1940, as amended).


 


(u)           Receivables.


 


(i)            Status.  Each Receivable reflected in the
computations included in any Borrowing Base Certificate meets the criteria
enumerated in clauses (a) through (o) of the definition “Eligible
Receivables,” except as disclosed in such Borrowing Base Certificate or as
disclosed in a timely manner in a subsequent Borrowing Base Certificate or
otherwise in writing to the Administrative Agent and the Lenders.


 


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(ii)           Chief Executive
Office.  The chief executive office
of the Borrower and the books and records relating to the Receivables of the
Borrower are located at the address or addresses set forth on Schedule 6.1(u).


 


(v)           Inventory.


 


(i)            Status.  All Inventory included in any Borrowing Base
Certificate meets the criteria enumerated in clauses
(a) through (g) of the
definition of “Eligible Inventory,” except as disclosed in such Borrowing Base
Certificate or in a subsequent Borrowing Base Certificate or as otherwise
specifically disclosed in writing to the Administrative Agent and the Lenders.


 


(ii)           Condition.  All Inventory of the Borrower is in good
condition, meets all standards imposed by any governmental agency or department
or division thereof having regulatory authority over such goods, their use or
sale, and is currently either usable or saleable in the normal course of the Borrower’s
business, except to the extent reserved against in the financial statements
delivered pursuant to Article 10
or as disclosed on a Schedule of Inventory delivered to the Administrative
Agent pursuant to Section 8.14(b).


 


(iii)          Location.  All Inventory is located on premises listed
on Schedule 6.1(v) or is Inventory
in transit to one of such locations, except as otherwise disclosed in writing
to the Administrative Agent and the Lenders.


 


(w)          Equipment.  All Equipment is in good order and repair in
all material respects.


 


(x)            Employee Relations.  Neither the Borrower nor any Subsidiary is,
except as set forth on Schedule 6.1(x),
party to any collective bargaining agreement nor has any labor union been
recognized as the representative of the Borrower’s or such Subsidiary’s
employees; the Borrower knows of no pending, threatened or contemplated
strikes, work stoppage or other labor disputes involving its employees or those
of its Subsidiaries.


 


(y)           Trade Names.  All trade names or styles under which the Borrower
or any Subsidiary sells Inventory or creates Receivables, or to which
instruments in payment of Receivables are made payable, are listed on Schedule 6.1(y).


 


(z)            Real Property.  Neither the Borrower nor any Subsidiary owns
any Real Estate or leases any Real Estate other than as described on Schedule 6.1(z).


 


(aa)         Bank Accounts, Lockboxes, Etc.  Schedule
6.1(aa) is a complete and correct list of all checking accounts,
deposit accounts, lockboxes and other bank accounts maintained by the Borrower.


 


Section 6.2             Survival
of Representations and Warranties, etc. 
All representations and warranties set forth in this Article 6 and all statements contained in
any certificate, financial statement, opinion or other instrument delivered by
or on behalf of the Borrower or any of its Subsidiaries pursuant to or in
connection with this Agreement or any of the Loan Documents (including, but not
limited to, any such made in or in connection with any amendment thereto) shall
constitute representations and warranties made under this Agreement.


 


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All
representations and warranties made under this Agreement shall be made or
deemed to be made at and as of the Agreement Date, at the Effective Date and at
and as of the date of making each Loan. 
All representations and warranties made or deemed to be made under this
Agreement shall survive and not be waived by the execution and delivery of this
Agreement, any investigation made by or on behalf of the Administrative Agent
or any Lender, or any borrowing hereunder.


 


ARTICLE 7


 


SECURITY INTEREST


 


Section 7.1             Security
Interest.


 


(a)           To secure the payment, observance and
performance of the Secured Obligations, the Borrower hereby mortgages, pledges
and assigns all of the Collateral owned by it or in which it has an interest to
the Administrative Agent and grants to the Administrative Agent a continuing
security interest in, and a continuing Lien upon, all of such Collateral.


 


(b)           As additional security for all of the
Secured Obligations, the Borrower grants to the Administrative Agent a security
interest in, and assigns to the Administrative Agent all of the Borrower’s
right, title and interest in and to, any deposits or other sums at any time
credited by or due from each Lender and each Affiliate of a Lender to the
Borrower, or credited by or due from any participant of any Lender to the
Borrower, with the same rights therein as if the deposits or other sums were
credited by or due from the Administrative Agent.  The Borrower hereby authorizes each Lender and each Affiliate of
such Lender and each participant to pay or deliver to the Administrative Agent,
for the account of the Lenders, without any necessity on the Administrative
Agent’s or any Lender’s part to resort to other security or sources of
reimbursement for the Secured Obligations, at any time during the continuation
of any Event of Default or in the event that the Administrative Agent, on
behalf of the Lenders, should make demand for payment hereunder and without
further notice to the Borrower (such notice being expressly waived), any of the
aforesaid deposits (general or special, time or demand, provisional or final)
or other sums for application to any Secured Obligation, irrespective of
whether any demand has been made or whether such Secured Obligation is mature,
and the rights given the Administrative Agent, the Lenders, their Affiliates
and participants hereunder are cumulative with each such Person’s other rights
and remedies, including other rights of set-off.  The Administrative Agent will promptly notify the Borrower of its
receipt of any such funds for application to the Secured Obligations, but
failure to do so will not affect the validity or enforceability thereof.  The Administrative Agent may give notice of
the above grant of a security interest in and assignment of the aforesaid
deposits and other sums and authorization to, and make any suitable
arrangements with, any Lender or any such Affiliate or participant of any
Lender for effectuation thereof, and the Borrower hereby irrevocably appoints
the Administrative Agent as its attorney to collect any and all such deposits
or other sums to the extent any such payment is not made to the Administrative
Agent or any Lender by such Lender, Affiliate or participant.


 


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Section 7.2             Continued
Priority of Security Interest.


 


(a)           The Security Interest granted by the
Borrower shall at all times be valid, perfected and enforceable against the
Borrower and all third parties in accordance with the terms of this Agreement,
as security for the Secured Obligations, and the Collateral shall not at any
time be subject to any Liens that are prior to, on a parity with or junior to
the Security Interest, other than Permitted Liens.


 


(b)           The Borrower shall, at its sole cost
and expense, take all action that may be necessary or desirable, or that the
Administrative Agent may reasonably request, so as at all times to maintain the
validity, perfection, enforceability and rank of the Security Interest in the
Collateral in conformity with the requirements of Section 7.2(a) or to enable the Administrative Agent to
exercise or enforce its rights hereunder, including, but not limited to:


 


(i)            paying all taxes,
assessments and other claims lawfully levied or assessed on any of the
Collateral, except to the extent that such taxes, assessments and other claims
constitute Permitted Liens,


 


(ii)           diligently seeking
to obtain, after the Agreement Date, landlords’, mortgagees’ or mechanics’
releases, subordinations or waivers,


 


(iii)          delivering to the
Administrative Agent, endorsed or accompanied by such instruments of assignment
as the Administrative Agent may specify, and stamping or marking in such manner
as the Administrative Agent may specify, any and all chattel paper,
instruments, letters and advices of guaranty and documents evidencing or
forming a part of the Collateral, and


 


(iv)          executing and
delivering financing statements, pledges, designations, hypothecation’s,
notices and assignments, in each case in form and substance satisfactory to the
Administrative Agent, relating to the creation, validity, perfection,
maintenance or continuation of the Security Interest under the UCC or other
Applicable Law.


 


(c)           The Administrative Agent is hereby
authorized to file one or more financing or continuation statements or
amendments thereto without the signature of or in the name of the Borrower (or
any of them) for any purpose described in Section
7.2(b).  A carbon,
photographic or other reproduction of this Agreement or of any of the Security
Documents or of any financing statement filed in connection with this Agreement
is sufficient as a financing statement to the fullest extent permitted by
Applicable Law.


 


(d)           If and to the extent specifically
requested by the Administrative Agent, the Borrower shall mark its books and
records as may be necessary or appropriate to evidence, protect and perfect the
Security Interest and shall cause its financial statements to reflect the
Security Interest.


 


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ARTICLE 8


 


COLLATERAL COVENANTS


 


Until the Revolving Credit Facility has been
terminated and all the Secured Obligations have been indefeasibly paid in full,
unless the Lenders shall otherwise consent in the manner provided in Section
15.10:


 


Section 8.1             Collection
of Receivables.


 


(a)           The Borrower will cause all moneys,
checks, notes, drafts and other payments relating to or constituting proceeds
of Receivables, or of any other Collateral, to be forwarded to a Lockbox for deposit
in an Agency Account in accordance with the procedures set out in the
corresponding Agency Account Agreement, and in particular the Borrower will:


 


(i)            advise each Account
Debtor to address all remittances with respect to amounts payable on account of
any Receivables to a specified Lockbox, and


 


(ii)           stamp all invoices
relating to any such amounts with a legend satisfactory to the Administrative
Agent indicating that payment is to be made to the Borrower via a specified
Lockbox.


 


(b)           The Borrower and the Administrative
Agent shall cause all collected balances in each Agency Account to be
transmitted daily by wire transfer or depository transfer check in accordance
with the procedures set forth in the corresponding Agency Account Agreement to
the Administrative Agent at the Agent’s Office,


 


(i)            for application, on
account of the Secured Obligations, as provided in Section 2.3(c), 12.2 and 12.3,
such credits to be entered upon receipt thereof and to be conditioned upon
final payment in cash or solvent credits of the items giving rise to them (provided, however,
that for the purposes of determining the outstanding principal amount of
Secured Obligations from time to time, among other things, in order to
determine Availability, such credits shall be deemed entered on the day of
receipt thereof), and


 


(ii)           with respect to any
balance remaining after such application, so long as no Default or Event of
Default has occurred and is continuing, for transfer to the Controlled
Disbursement Account or such other account of the Borrower as the Borrower and
the Administrative Agent may agree.


 


(c)           Any moneys, checks, notes, drafts or
other payments referred to in subsection (a) of
this Section 8.1 which are
received by or on behalf of the Borrower will be held in trust for the
Administrative Agent and will be delivered to the Administrative Agent at the
Agent’s Office as promptly as possible in the exact form received, together
with any necessary endorsements.


 


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Section 8.2             Verification
and Notification.  The
Administrative Agent shall have the right


 


(a)           at any time and from time to time, in
the name of the Administrative Agent or the Lenders, or in the name of the
Borrower, to verify the validity, amount or any other matter relating to any
Receivables by mail, telephone, telegraph or otherwise, and


 


(b)           after a demand for payment or an
Event of Default, to notify the Account Debtors or obligors under any
Receivables of the assignment of such Receivables to the Administrative Agent
and to direct such Account Debtors or obligors to make payment of all amounts
due or to become due thereunder directly to the Administrative Agent and, upon
such notification and at the expense of the Borrower, to enforce collection of
any such Receivables and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as the Borrower might have
done, provided that if such demand
is withdrawn or such Event of Default is cured or waived (as evidenced by a
written acknowledgment to that effect by the Administrative Agent), the
Administrative Agent shall cease so to notify new Account Debtors.


 


Section 8.3             Disputes,
Returns and Adjustments.


 


(a)           In the event any amounts due and
owing under any Receivable for an amount in excess of $500,000 (or such lower
amount as the Administrative Agent may establish from time to time in the
exercise of its reasonable credit judgment) are in material dispute in the
judgment of the Borrower between the Account Debtor and the Borrower, the
Borrower shall provide the Administrative Agent with prompt written notice
thereof.


 


(b)           The Borrower shall notify the
Administrative Agent promptly of all material returns and credits in excess of
$250,000 (or such lower amount as the Administrative Agent may establish from
time to time in the exercise of its reasonable credit judgment) in respect of
any Receivables, which notice shall specify the Receivables affected.


 


(c)           The Borrower may, in the ordinary
course of business and prior to a Default or an Event of Default, grant any
extension of time for payment of any Receivable or compromise, compound or
settle the same for less than the full amount thereof or release wholly or
partly any Person liable for the payment thereof or allow any credit or
discount whatsoever thereon; provided
that (i) no such action results in the reduction of more than $500,000 (or
such lower amount as the Administrative Agent may establish from time to time
in the exercise of its reasonable credit judgment) in the amount payable with
respect to all Receivables in any Fiscal Month of the Borrower, and
(ii) the Administrative Agent is promptly notified of the amount of such
adjustments and the Receivable(s) affected thereby.


 


Section 8.4             Invoices.  Upon the request of the Administrative
Agent, the Borrower shall deliver to the Administrative Agent, at the
Borrower’s expense, copies of customers’ invoices or the equivalent, original
shipping and delivery receipts or other proof of delivery, customers’
statements, the photocopy of all documents, including, without limitation,
repayment histories and present status reports, relating to Receivables and
such other documents and information relating to the Receivables as the
Administrative Agent shall specify.


 


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Section 8.5             Delivery
of Instruments.  In the event any
Receivable in an amount in excess of $100,000 is, or Receivables in excess of
$500,000 in the aggregate are, at any time evidenced by a promissory note or notes,
trade acceptance or any other instrument for the payment of money, the Borrower
will immediately upon demand by the Administrative Agent, deliver such
instruments to the Administrative Agent, appropriately endorsed to the
Administrative Agent.


 


Section 8.6             Sales
of Inventory.  All sales of
Inventory will be made in compliance with all requirements of Applicable Law.


 


Section 8.7             Returned
Goods.  The Security Interest in the
Inventory shall, without further act, attach to the cash and non-cash proceeds resulting
from the sale or other disposition thereof and to all Inventory which is
returned to the Borrower by customers or is otherwise recovered.


 


Section 8.8             Ownership
and Defense of Title.


 


(a)           The Borrower shall at all times be
the sole owner of each and every item of Collateral and shall not create any
Lien, except for Permitted Liens, on, or, except as permitted by Section 11.7, sell, lease, exchange,
assign, transfer, pledge, hypothecate, grant a security interest or security
title in or otherwise dispose of, any of the Collateral or any interest
therein, except for sales of Inventory in the ordinary course of business, for
cash or on open account or on terms of payment ordinarily extended to its
customers and except as otherwise expressly contemplated herein.  The inclusion of “proceeds” of the
Collateral under the Security Interest shall not be deemed a consent by the
Administrative Agent or any Lender to any other sale or other disposition of
any part or all of the Collateral.


 


(b)           The Borrower shall defend its title
in and to the Collateral and shall defend the Security Interest in the
Collateral against the claims and demands of all Persons.


 


Section 8.9             Insurance.


 


(a)           The Borrower shall at all times
maintain insurance on its Inventory against loss or damage by fire, theft,
burglary, pilferage, loss in transit and such other hazards as the
Administrative Agent shall reasonably specify, in amounts and under policies
issued by insurers acceptable to the Administrative Agent in its reasonable
judgment.  All premiums on such
insurance shall be paid by the Borrower and copies of the policies delivered to
the Administrative Agent.  The Borrower
will not use or permit the Inventory to be used in violation of any Applicable
Law or in any manner which might render inapplicable any insurance coverage.


 


(b)           All insurance policies required under
Section 8.9(a) with respect to
Inventory shall name the Administrative Agent as an additional named insured
and shall contain “New York standard” loss payable clauses in the form
submitted to the Borrower by the Administrative Agent, or otherwise in form and
substance satisfactory to the Administrative Agent, naming the Administrative
Agent as loss payee as its interests may appear, and providing that (i) all
proceeds thereunder shall be payable to the Administrative Agent, (ii) no such
insurance shall be affected by any act or neglect of the insured or owner of
the property


 


71

















 


described in
such policy, and (iii) such policy and loss payable clauses may not be
canceled, amended or terminated unless at least 30 days’ prior written notice
is given to the Administrative Agent.


 


(c)           Any proceeds of insurance referred to
in this Section 8.9 which are paid
to the Administrative Agent shall be applied, first, to the repayment of the
Revolving Credit Loans until paid in full and then, so long as no Event of
Default shall exist, to the Borrower or as it may direct.


 


Section 8.10           Location
of Offices and Collateral.


 


(a)           The Borrower will not change the
location of its chief executive office or the place where it keeps its books
and records relating to the Collateral or change its name, identity, corporate
structure or state of incorporation or organization number, without giving the
Administrative Agent 30 days’ prior written notice thereof.


 


(b)           All Inventory, other than Inventory
in transit to any such location, will at all times be kept by the Borrower at
one of its locations set forth in Schedules
6.1(u), and shall not, without the prior written consent of the
Administrative Agent, be removed therefrom, except for sales of Inventory
permitted under Section 8.8.


 


(c)           If any Inventory is in the possession
or control of the Borrower’s agents or processors, the Borrower shall notify
such agents or processors of the Security Interest and, upon the occurrence of
an Event of Default, shall instruct them (and cause them to acknowledge such
instruction) to hold all such Inventory for the account of the Administrative
Agent, subject to the instructions of the Administrative Agent.


 


Section 8.11           Records
Relating to Collateral.


 


(a)           The Borrower will at all times (i)
keep complete and accurate records of Inventory on a basis consistent with past
practices of the Borrower, itemizing and describing the kind, type and quantity
of Inventory and the Borrower’s cost therefor and a current price list for such
Inventory, and (ii) keep complete and accurate records of all other Collateral.


 


(b)           The Borrower will take a physical
listing of all Inventory, wherever located, at least annually.


 


Section 8.12           Inspection.  The Administrative Agent (by any of its
officers, employees or agents) shall have the right, to the extent that the
exercise of such right shall be within the control of the Borrower, at any time
or times to inspect the Collateral, all files relating thereto and the premises
upon which any of the Collateral is located, to discuss the Borrower’s affairs
and finances, insofar as the same are reasonably related to the rights of the
Administrative Agent or any Lender hereunder or under any of the Loan
Documents, with any Person, to verify the amount, quantity, value and condition
of, or any other matter relating to, any of the Collateral and in this
connection to review, audit and make extracts from all records and files
related to any of the Collateral.  The
Borrower will deliver to the Administrative Agent any instrument necessary for
it to obtain records from any service bureau maintaining records on behalf of
the Borrower.


 


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Section 8.13           Appraisals
and Field Exams.  Not less often
than twice during each 12-month period, the Borrower shall, at its sole
expense, provide to the Administrative Agent appraisals of its Inventory in
form and substance and on such basis and conducted by an appraiser reasonably
satisfactory to the Administrative Agent. 
The Borrower shall cooperate with the Administrative Agent in connection
with and pay the fees and expenses associated with not less than four Field
Exams of Borrower and its Subsidiaries during each 12-month period.  Nothing contained in this Section 8.13 shall limit the right of the
Administrative Agent to require appraisals and conduct Field Exams at more
frequent intervals.


 


Section 8.14           Information
and Reports.


 


(a)           Schedule of Receivables.


 


(i)            Weekly Schedule
of Receivables.  The Borrower shall
deliver to the Administrative Agent not later than Wednesday of each week a
Schedule of Receivables which:


 


(A)          shall be prepared as
of the last Business Day of the immediately preceding week, and


 


(B)           shall set forth a
summary aged trial balance of all its then existing Receivables, specifying the
names and balance due for each Account Debtor obligated on a Receivable so
listed.


 


(ii)           Monthly Schedule
of Receivables.  The Borrower shall
deliver to the Administrative Agent not later than the 15th day (or,
if such month is the last month of a Fiscal Quarter, the 20th day)
of each calendar month a Schedule of Receivables which:


 


(A)          shall be prepared as
of the last day of the immediately preceding Fiscal Month,


 


(B)           shall be reconciled
to the Borrowing Base Certificate as of such last day,


 


(C)           shall set forth a
summary aged trial balance of all its then existing Receivables, specifying the
names and balance due for each Account Debtor obligated on a Receivable so
listed, and


 


(D)          shall include on such
schedule delivered for the months of March and September of each year an
Account Debtor address list including all Account Debtors on Receivables
reflected on such schedule.


 


(b)           Schedule of Inventory.  The Borrower shall deliver to the
Administrative Agent not later than the 15th day (or, if such month is the last
month of a Fiscal Quarter, the 20th day) of each calendar month”;
except for the first month of each Fiscal Year, in which month the Borrower
shall deliver to the Administrative Agent by the last day of the month, a
Schedule of Inventory as of the last day of the immediately preceding Fiscal
Month, in the form and manner satisfactory to the Administrative Agent.


 


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(c)           Daily Sales Reports.  The Borrower shall provide the
Administrative Agent on each Business Day a report of sales for the immediately
preceding Business Day in form and substance satisfactory to the Administrative
Agent.


 


(d)           Borrowing Base Certificate.  The Borrower will deliver to the
Administrative Agent not later than the 15th day (or, if such month is the last
month of a Fiscal Quarter, the 20th day) of each calendar month, a
Borrowing Base Certificate prepared as of the close of business on the last day
of the prior Fiscal Month.


 


(e)           Notice of Diminution of Value.  The Borrower shall give prompt notice to the
Administrative Agent of any matter or event which has resulted in, or may
result in, the actual or potential diminution in the value of any of the
Collateral in an amount which in the reasonable judgment of the Borrower is
material, except for any diminution in the value of any Receivables or
Inventory in the ordinary course of business which has been appropriately
reserved against, as reflected in the financial statements previously delivered
to the Administrative Agent and the Lenders pursuant to Article 10.


 


(f)            Certification.  Each of the schedules delivered to the
Administrative Agent pursuant to this Section
8.14 shall be certified by the Chief Financial Officer to be true,
correct and complete as of the date indicated thereon.


 


(g)           Other Information.  The Administrative Agent may in its
discretion from time to time, require the Borrower to deliver the schedules
described in Section 8.14(a), (b)
and (c), more or less often and on
different schedules than specified in such Section, and the Borrowers will
comply with such requests.  The Borrower
shall also furnish to the Administrative Agent such other information with
respect to the Collateral as the Administrative Agent may from time to time
reasonably request.


 


Section 8.15           Power
of Attorney.  The Borrower hereby
appoints the Administrative Agent as its attorney, with power


 


(a)           to endorse the name of the Borrower
on any checks, notes, acceptances, money orders, drafts or other forms of
payment or security that may come into the Administrative Agent’s possession,
including on any drafts related to letters of credit supporting the obligations
of Account Debtors, and to sign the name of the Borrower on notices of
assignment, financing statements and other public records relating to the
perfection or priority of the Security Interest or verifications of account,
and


 


(b)           from and after the occurrence of an
Event of Default (which has not been cured or waived, as evidenced by a written
acknowledgment thereof by the Administrative Agent), to sign the name of the
Borrower on any invoice or bill of lading relating to any Receivables,
Inventory or other Collateral, on schedules and assignments of Receivables
furnished to the Administrative Agent by the Borrower, and on notices to or
from customers.


 


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ARTICLE 9


 


AFFIRMATIVE COVENANTS


 


Until the Revolving Credit Facility has been
terminated and all the Secured Obligations have been indefeasibly paid in full,
unless the Lenders shall otherwise consent in the manner provided for in Section
15.10, the Borrower will and, as appropriate, will cause each of its
Subsidiaries to:


 


Section 9.1             Punctual
Payments.  Pay when due (i)
interest, principal, and premium, if any, on the Loans at the times and place
and in the manner specified herein and (ii) any fees and other Secured
Obligations at the times and place and in the manner specified with respect
thereto.


 


Section 9.2             Preservation
of Corporate Existence and Similar Matters.  Preserve and maintain its corporate existence, rights,
franchises, licenses and privileges in the jurisdiction of its incorporation
and qualify and remain qualified as a foreign corporation and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification or authorization, except
where the failure to maintain such corporate existence, qualification or
authorization would not, either singly or in the aggregate, have a Materially
Adverse Effect, except that the
existence of any such Subsidiary may be terminated (by dissolution, merger or
any other means) upon the good faith determination of such Subsidiary’s board
of directors that such termination is in the best interest of the Subsidiary
and its various constituencies and the taking of appropriate action by the
shareholder(s) of such Subsidiary.


 


Section 9.3             Compliance
with Applicable Law.  Comply with
all Applicable Law, if the failure to comply therewith would have a Materially
Adverse Effect.


 


Section 9.4             Maintenance
of Property.  Protect and preserve
all properties material to its business, including all Proprietary Rights, and
maintain in good repair, working order and condition in all material respects
all tangible properties, and from time to time make or cause to be made all
needed and appropriate repairs, renewals, replacements and additions to such
properties necessary for the conduct of its business, so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times.


 


Section 9.5             Conduct
of Business.  At all times engage
only in businesses in substantially the same fields as the businesses conducted
on the Agreement Date or as otherwise expressly contemplated herein.


 


Section 9.6             Insurance.  Maintain insurance with responsible
insurance companies against such risks and in such amounts as is customarily
maintained by similar businesses or as may be required by Applicable Law, and
from time to time deliver to the Administrative Agent upon its request a
detailed list of the insurance then in effect, stating the names of the
insurance companies, the amounts and rates of the insurance, the dates of the
expiration thereof and the properties and risks covered thereby.


 


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Section 9.7             Payment
of Taxes and Claims.  Pay or
discharge when due:


 


(a)           all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or
upon any properties belonging to it, and


 


(b)           all lawful claims of materialmen,
mechanics, carriers, warehousemen and landlords for labor, materials, supplies
and rentals which, if unpaid, are reasonably likely to become a Lien on any of
its properties;


 


except
that this Section
9.6 shall not require the payment or discharge of any such tax,
assessment, charge, levy or claim which is being contested in good faith by
appropriate proceedings and for which adequate reserves have been established
on the appropriate books.


 


Section 9.8             Accounting
Methods and Financial Records. 
Maintain a system of accounting, and keep such books, records and
accounts (which shall be true and complete), as may be required or as may be
necessary to permit the preparation of financial statements in accordance with
GAAP consistently applied.  In addition,
the Borrower shall at all times maintain detailed accounting records relating
to intercompany advances and repayments resulting from borrowings and
repayments of Revolving Credit Loans.


 


Section 9.9             Visits
and Inspections.  Permit
representatives of the Administrative Agent from time to time, as often as may
be reasonably requested, but only during normal business hours and, if no
Default or Event of Default has occurred, upon prior notice, to


 


(a)           visit and inspect its properties,


 


(b)           inspect and make extracts from its
relevant books and records, including, but not limited to, management letters
prepared by independent accountants, and


 


(c)           after reasonable prior notice of its
intent to do so, discuss with its principal officers and its independent
accountants, its business, assets, liabilities, financial condition, results of
operations and business prospects.


 


Representatives
of the Lenders may accompany the Administrative Agent on such visits and, if
the Administrative Agent shall have furnished to the Lenders fewer than four
reports of Field Exams conducted with respect to the Borrower within the
previous 12 months, any Lender may, subject to the other terms and conditions
of this Section
9.9 applicable to the Administrative Agent, make such visits to the
Borrower on its own.  The Administrative
Agent and the Lenders will take all reasonable steps to minimize any disruption
of the Borrower’s operations that might be caused by the Lenders’ exercising
any such inspection privileges and will coordinate with and through the
Administrative Agent, any visits to the Borrower’s premises.


 


Section 9.10           Use
of Proceeds.


 


(a)           Use the proceeds of all Loans for
working capital and general business purposes, excluding the repurchase of
Senior Notes,


 


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(b)           not use any part of such proceeds for
any purpose which would involve a violation of Regulation G or U or T or X of
the Board of Governors of the Federal Reserve System, or for any other purpose
prohibited by law or by the terms and conditions of this Agreement.


 


Section 9.11           Subsidiary
Guaranties.  Upon the request of the
Administrative Agent or the Required Lenders, cause any Person which is, or
becomes after the Effective Date, a Subsidiary organized under the laws of any
jurisdiction within the United States, to execute and deliver a guaranty of the
Secured Obligations (or any part thereof specified by the Administrative Agent)
and a security agreement, each in form and substance satisfactory to the
Administrative Agent, unless such Subsidiary is expressly prohibited by statute
from issuing a guaranty or security agreement.


 


Section 9.12           Hazardous
Waste and Substances.  In addition
to, and not in derogation of, the requirements of Section 9.2 and of the Security Documents, comply with all
laws, governmental standards and regulations applicable to the Borrower or to
any of its assets in respect of occupational health and safety laws, rules and
regulations and Environmental Laws (unless such laws, rules, standards or
regulations are being contested by the Borrower in good faith by appropriate
proceedings and adequate reserves therefor have been established on the books
of the Borrower), promptly notify the Administrative Agent of its receipt of
any notice of a violation of any such law, rule, standard or regulation and
indemnify and hold the Administrative Agent and each Lender harmless from all
loss, cost, damage, liability, claim and expense incurred by or imposed upon
the Administrative Agent or any Lender on account of the Borrower’s failure to
perform its obligations under this Section
9.12.


 


Section 9.13           Merger
of Rauch.  If the Rauch Sale has not
been consummated on or before April 30, 2004 or such later date which may be
determined by the Agent in its discretion, the Borrower shall cause Rauch to
merge into the Borrower with the Borrower as the surviving corporation on or
before May 15, 2004.


 


Section 9.14           Assumption
of Obligations.  The Borrower hereby
assumes in their entirety each and every obligation, liability, agreement and
undertaking of each of the Merged Subsidiaries under the Loan Documents.


 


ARTICLE 10


 


INFORMATION


 


All written information, reports, statements and other
papers and data furnished to the Administrative Agent or any Lender, whether
pursuant to this Article 10 or any other provision of this Agreement or any of
the other Loan Documents, shall be, at the time the same is so furnished,
complete and correct in all material respects to the extent necessary to give
the Administrative Agent or such Lender true and accurate knowledge of the subject
matter.  Until the Revolving Credit
Facility has been terminated and all the Secured Obligations have been
indefeasibly paid in full, unless the Lenders shall otherwise consent in the
manner set forth in Section 15.10, the Borrower will furnish to
the Administrative Agent and to each Lender at its office then designated for
notices pursuant to Section 15.1:


 


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Section 10.1           Financial
Statements.


 


(a)           Audited Year-End Statements.  As soon as available, but in any event
within 90 days after the end of each Fiscal Year, copies of (i) the
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
at the end of such Fiscal Year and the related consolidated statements of
income, shareholders’ equity and cash flows of the Borrower and its
Consolidated Subsidiaries for such Fiscal Year setting forth in each case in
comparative form the figures for the previous Fiscal Year and reported on,
without qualification, by Deloitte & Touche or other “Big 6” independent
certified public accountants selected by the Borrower, which report shall be
prepared in accordance with GAAP; (ii) consolidating balance sheets of the
Borrower and its Consolidated Subsidiaries as at the end of such Fiscal Year,
and consolidating statements of income, shareholders equity and cash flow of
the Borrower and its Consolidated Subsidiaries for such Fiscal Year, setting
forth in each in comparative form the figures for the previous Fiscal Year in
such form and detail as reasonably required by the Administrative Agent.


 


(b)           Monthly Financial Statements.  As soon as available, but in any event
within 30 days after the end of each of the first two Fiscal Months of each
fiscal quarter of the Borrower and within 45 days after the end of each fiscal
quarter of the Borrower, copies of the unaudited consolidated and consolidating
balance sheets of the Borrower and its Consolidated Subsidiaries as at the end
of such period and the related unaudited consolidated and consolidating statements
of income and cash flow of the Borrower and its Consolidated Subsidiaries for
such period and for the portion of the Fiscal Year through such Fiscal Month or
quarter (and with respect to such consolidated financial statements for any
fiscal quarter, setting forth in each case in comparative form the figures for
the corresponding period of the previous Fiscal Year) in such form and detail
as is reasonably required by the Administrative Agent and certified by the
Chief Financial Officer to the best of his knowledge as presenting fairly the
financial condition and results of operations of the Borrower and its
Consolidated Subsidiaries as at the date thereof and for the periods ended on
such date, subject to normal year-end adjustments.


 


All
such financial statements shall be complete and correct in all material
respects and prepared in accordance with GAAP (except, with respect to interim
financial statements, for the omission of notes) applied consistently
throughout the periods reflected therein.


 


(c)           Annual Projections.  As soon as available, but in any event not
later than December 15 of each year, forecasted, consolidated balance sheets,
income statements and cash flow statements of the Borrower and its Consolidated
Subsidiaries, prepared on a monthly basis, for the succeeding Fiscal Year.


 


Section 10.2           Accountants’
Certificate.  Together with each
delivery of financial statements required by Section
10.1(a), the Borrower shall deliver a certificate of the accountants
who performed the audit in connection with such statements


 


(a)           stating that they have reviewed this
Agreement and that, in making the audit necessary to the issuance of a report
on such financial statements, they have obtained no knowledge of any Default or
Event of Default or, if such accountants have obtained knowledge of a Default
or Event of Default, specifying the nature and period of existence thereof, and


 


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(b)           setting forth the calculations
necessary to establish whether or not the Borrower was in compliance with the
covenants contained in Sections 11.1,
11.2, 11.5 and 11.6 as
of the date of such statements.


 


The
Borrower authorizes the Administrative Agent to discuss the financial condition
of the Borrower with the Borrower’s independent certified public accountants
and agree that such discussion or communication shall be without liability to
either the Administrative Agent or the Borrower’s independent certified public
accountants.  The Borrower shall deliver
a letter addressed to such accountants authorizing them to comply with the
provisions of this Section 10.2.


 


Section 10.3           Officer’s
Certificate.  Together with each
delivery of financial statements required by Section
10.1(a) or (b), the
Borrower shall also furnish a certificate of the Chief Financial Officer
stating that, based on an examination sufficient to enable him to make an
informed statement, (i) no Default or Event of Default exists or, if such is
not the case, specifying such Default or Event of Default and its nature, when
it occurred, and the steps being taken by the Borrower with respect to such
Default or Event of Default and (ii) setting forth the calculations necessary
to establish whether or not the Borrower was in compliance with the covenants
contained in Sections 11.1, 11.2, 11.5
and 11.6 as of the date of such
statements.


 


Section 10.4           Copies
of Other Reports.


 


(a)           Promptly upon receipt thereof, copies
of all reports, if any, submitted to the Borrower or its Board of Directors by
its independent public accountants, including, without limitation, all
management reports.


 


(b)           As soon as practicable, copies of all
financial statements and reports that the Borrower sends to its shareholders
generally or to holders of the Senior Notes or any other Debt of the Borrower (other
than the Loans), and all registration statements (including amendments thereto)
and all regular or periodic reports which the Borrower files with the SEC.


 


(c)           From time to time and promptly upon
each request, such forecasts, data, certificates, reports, statements, opinions
of counsel, documents or further information regarding the business, assets,
liabilities, financial condition, results of operations or business prospects
of the Borrower as the Administrative Agent or any Lender through the Administrative
Agent may reasonably request and which the Borrower without unreasonable
expense (other than any legal opinion as to the perfected status or priority of
the Security Interest in any Collateral) may obtain.  The rights of the Administrative Agent and the Lenders under this
Section 10.4(c) are in addition to
and not in derogation of its rights under any other provision of this Agreement
or any Loan Document.


 


(d)           If requested by any Lender, the
Borrower will furnish to such Lender statements in conformity with the
requirements of Federal Reserve Form G-1 or U-1 referred to in Regulations G
and U, respectively, of the Board of Governors of the Federal Reserve System.


 


Section 10.5           Notice
of Litigation and Other Matters. 
Prompt notice of:


 


(a)           the commencement, to the extent the
Borrower is aware of the same, of all proceedings and investigations by or
before any governmental or nongovernmental body and all


 


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actions and
proceedings in any court or before any arbitrator against or in any other way
relating adversely to, or adversely affecting, the Borrower or any Affiliate of
the Borrower or any of their respective property, assets or businesses which
might, in the aggregate, cause a Default or an Event of Default or have a
Materially Adverse Effect,


 


(b)           any amendment of the articles or
certificate of incorporation or by-laws of the Borrower,


 


(c)           any change in the business, assets,
liabilities, financial condition or results of operations of the Borrower or
any Affiliate of the Borrower which has had or may have any Materially Adverse
Effect and any change in the executive officers of the Borrower, and


 


(d)           any (i) Default or Event of
Default or (ii) event that constitutes or that, with the passage of time
or giving of notice or both, would constitute a default or event of default by
the Borrower under any material agreement (other than this Agreement) to which
the Borrower is a party or by which the Borrower or any of its property may be
bound if the exercise of remedies thereunder by the other party to such
agreement would have a Materially Adverse Effect.


 


Section 10.6           ERISA.  As soon as possible and in any event within
30 days after the Borrower knows, or has reason to know, that:


 


(a)           any ERISA Event with respect to a
Benefit Plan has occurred or will occur, or


 


(b)           the aggregate present value of the
Unfunded Vested Accrued Benefits under all Benefit Plans has increased to an
amount in excess of $4,000,000, or


 


(c)           the Borrower is in “default” (as defined
in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer
Plan required by reason of its complete or partial withdrawal (as described in
Section 4203 or 4205 of ERISA) from such Multiemployer Plan, a certificate of
the president or the Chief Financial Officer setting forth the details of such
of the events described in clauses (a)
through (c) as applicable and the
action which is proposed to be taken with respect thereto and, simultaneously
with the filing thereof, copies of any notice or filing that any agency of the
United States government may require with respect to such of the events
described in clauses (a) through (c) as applicable.


 


Section 10.7           Revisions
or Updates to Schedules.  Should any
of the information or disclosures provided on any of the Schedules originally
attached hereto become outdated or incorrect in any material respect, the
Borrower shall provide promptly, and in any event with 10 Business Days after
the Borrower has knowledge thereof, to the Administrative Agent such revisions
or updates to such Schedule(s) as may be necessary or appropriate to update or
correct such Schedule(s); provided
that no such revisions or updates to any Schedule(s) shall be deemed to have
cured any breach of warranty or representation resulting from the inaccuracy or
incompleteness of any such Schedule(s) unless and until the Required Lenders,
in their sole discretion, shall have accepted in writing such revisions or
updates to such Schedule(s).  From and
after such acceptance, all representations and warranties make with reference
to any such Schedule, shall be deemed to be made with reference to such
Schedule as corrected or updated.


 


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ARTICLE 11


 


NEGATIVE COVENANTS


 


Until the Revolving Credit Facility has been
terminated and all the Secured Obligations have been indefeasibly paid in full,
unless the Lenders shall otherwise consent in the manner set forth in Section
15.10, the Borrower will not, nor will it permit any Subsidiary to,
directly or indirectly:


 


Section 11.1           Financial
Ratios.


 


(a)           Minimum Interest Coverage Ratio.  Permit the ratio of (i) Covenant EBITDA for
any period of four Fiscal Quarters ending on or after December 31, 2004, to
(ii) the Cash Interest Expense of the Borrower and its Consolidated
Subsidiaries for such period to be less than 1.00 to 1.00.


 


(b)           Minimum Fixed Charge Coverage
Ratio.  Permit its Covenant Fixed
Charge Coverage Ratio for the Fiscal Year ending December 31, 2005 and for each
period of four consecutive Fiscal Quarters ending thereafter to be less than
1.00 to 1.00.


 


Section 11.2           Debt.  Create, assume, or otherwise become or
remain obligated in respect of, or permit or suffer to exist or to be created,
assumed or incurred or to be outstanding any Debt, except that this Section 11.2 shall not apply to:


 


(a)           the Secured Obligations,


 


(b)           Indebtedness set forth on Schedule 6.1(h) - Existing Debt and Guaranties
and any extension, replacement or refinancing thereof that does not increase
the principal amount of such Debt outstanding immediately prior to such
extension, replacement or refinancing,


 


(c)           Permitted Purchase Money Debt,


 


(d)           Debt assumed or issued in connection
with Acquisitions of Business Units or Subsidiaries permitted pursuant to the
provisions of Section 11.4, and


 


(e)           Debt of foreign Subsidiaries of the
Borrower.


 


Section 11.3           Guaranties.  Except as set forth on Schedule 6.1(h) - Existing Debt and Guaranties
or otherwise, as to the Borrower, in the ordinary course of its business,
become or remain liable with respect to any Guaranty of any obligation of any
other Person other than Permitted Guaranties.


 


Section 11.4           Investments.  Acquire, after the Effective Date, any
Business Unit or Investment or, after such date, permit any Investment to be
outstanding, other than Permitted Investments.


 


Section 11.5           Capital
Expenditures.  Make or incur any
Capital Expenditures; provided, however, that the Borrower may make or incur Capital
Expenditures in an aggregate


 


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amount not to
exceed $6,000,000 in the Fiscal Year ending December 31, 2004 and $2,000,000 in
each Fiscal Year thereafter.


 


Section 11.6           Restricted
Distributions and Payments, Etc. 
Declare or make any Restricted Distribution or Restricted Payment, provided, however, that so long as no
Default or Event of Default has occurred and is continuing or would exist after
giving effect thereto,


 


(a)           any Debt owing by any Subsidiary to
another Subsidiary, may be repaid,


 


(b)           any wholly owned Subsidiary may pay
cash dividends to the Borrower, and


 


(c)           Syratech
may pay management fees to Lee and its Affiliates not in excess of $450,000 in
the aggregate in any Fiscal Year.


 


Section 11.7           Merger,
Consolidation and Sale of Assets. 
Merge or consolidate with any other Person or, except as contemplated by
the Rauch Sale, sell, lease or transfer or otherwise dispose of all or a
substantial portion of its assets to any Person; provided, however, that any Subsidiary shall be permitted to
merge or consolidate with or to sell its assets to the Borrower.


 


Section 11.8           Transactions
with Affiliates.  Except as to any
such transactions in place on the Effective Date and listed on Schedule 11.8, effect any transaction with
any Affiliate on a basis less favorable to the Borrower than would be the case
if such transaction had been effected with a Person not an Affiliate.


 


Section 11.9           Liens.  Create, assume or permit or suffer to exist
or to be created or assumed any Lien on any of the property or assets of the
Borrower or any Subsidiary, real, personal or mixed, tangible or intangible,
other than Permitted Liens, Liens set forth on
6.1(g) - Existing Liens.


 


Section 11.10         Benefit.  Permit, or take any action which would
result in, an ERISA Event or the aggregate present value of the Unfunded Vested
Accrued Benefits under all Benefit Plans of the Borrower to exceed $4,000,000.


 


Section 11.11         Change
in Business.  Engage in any line of
business other than that set forth on Schedule
6.1(e) - Business.


 


Section 11.12         Change
in Accounting Policies.  Change the
fiscal year of the Borrower from a year ending on December 31 or account for
Inventories, other than silver inventory, on other than a FIFO basis.


 


Section 11.13         Amendment
to Senior Note Documents.  Amend the
Senior Notes, the Senior Indenture or any related documents without the prior
written consent of the Required Lenders.


 


Section 11.14         Minimum
Availability.  Permit Revolving
Credit Availability at any time to be less than (i) $7,500,000 from and
including May 1 through and including December 30 of each Fiscal Year; or (ii)
$20,000,000 from and including December 31 through


 


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and including
April 30 of each Fiscal Year, provided
that (A) so long as no Default or Event of Default exists and Borrower’s
Covenant EBITDA for the three Fiscal Quarter period ending September 30, 2004
equals or exceeds Plan EBITDA for such period, the Revolving Credit
Availability during the period from and including December 31, 2004 through and
including March 31, 2005 shall be not less than $15,000,000, and so long as no
Default or Event of Default exists, the Revolving Credit Availability during
the period from and including April 1, 2005 through and including April 30,
2005 shall be not less than $15,000,000 and (B) so long as no Default or Event
of Default exists and the Covenant Fixed Charge Coverage Ratio for the four
Fiscal Quarter period ending September 30, 2005 is not less than 1:00 to 1:00,
the Revolving Credit Availability during the period from and including December
31, 2005 through and including April 30, 2006 shall be not less than
$15,000,000.


 


ARTICLE 12


 


DEFAULT


 


Section 12.1           Events
of Default.  Each of the following
shall constitute an Event of Default, whatever the reason for such event and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment or order of any court or any order, rule or
regulation of any governmental or nongovernmental body:


 


(a)           Default in Payment of Loans.  The Borrower shall default in any payment of
principal of, or interest on, any Loan or Note when and as due (whether upon
demand, at maturity, by reason of acceleration or otherwise).


 


(b)           Other Payment Default.  The Borrower shall default in the payment, as
and when due, of principal of or interest on, any other Secured Obligation, and
such default shall continue for five days after written notice thereof has been
given to the Borrower by the Administrative Agent.


 


(c)           Misrepresentation.  Any representation or warranty made or
deemed to be made by the Borrower under this Agreement, any other Loan Document
or any amendment hereto or thereto shall at any time prove to have been
incorrect or misleading in any material respect when made.


 


(d)           Default in Performance.  The Borrower shall default in the
performance or observance of any term, covenant, condition or agreement
contained in


 


(i)            Article 7 or Section 11.1 or 11.14,
and the Administrative Agent shall have notified the Borrower of the Required
Lenders’ intention to declare such Default as an Event of Default, or


 


(ii)           this Agreement
(other than as specifically provided for otherwise in this Section 12.1) and such default shall
continue for a period of 30 days after written notice thereof has been given to
the Borrower by the Administrative Agent.


 


(e)           Cross Default.  The occurrence of any “Event of Default” as
defined in the Senior Note Indenture or the Borrower or any Subsidiary shall
fail to pay when due and payable


 


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the principal
of or interest on any Debt (other than the Loans) outstanding in a principal
amount in excess of $2,000,000, or the maturity of any such Debt shall have
(i) been accelerated (declared to be due and payable) in accordance with
the provisions of any indenture, contract or instrument providing for the
creation of or concerning such Debt, or (ii) been required to be prepaid
prior to the stated maturity thereof, or any event shall have occurred and be
continuing which would permit any holder or holders of such Debt, any trustee
or agent acting on behalf of such holder or holders or any other Person so to
accelerate such maturity, and the Borrower shall have failed to cure such
default prior to the expiration of any applicable cure or grace period.


 


(f)            Voluntary Bankruptcy Proceeding.  The Borrower or any Subsidiary shall


 


(i)            commence a
voluntary case under the federal bankruptcy laws (as now or hereafter in
effect),


 


(ii)           file a petition
seeking to take advantage of any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or composition for
adjustment of debts,


 


(iii)          consent to or fail
to contest in a timely and appropriate manner any petition filed against it in
an involuntary case under such bankruptcy laws or other laws,


 


(iv)          apply for or consent
to, or fail to contest in a timely and appropriate manner, the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of a substantial part of its property, domestic or foreign,


 


(v)           admit in writing its
inability to pay its debts as they become due,


 


(vi)          make a general
assignment for the benefit of creditors, or


 


(vii)         take any corporate
or other action for the purpose of authorizing any of the foregoing.


 


(g)           Involuntary Bankruptcy Proceeding.  A case or other proceeding shall be
commenced against the Borrower or any Subsidiary in any court of competent
jurisdiction seeking


 


(i)            relief under the
federal bankruptcy laws (as now or hereafter in effect) or under any other
laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization,
winding up or adjustment of debts, or


 


(ii)           the appointment of
a trustee, receiver, custodian, liquidator or the like of the Borrower or any
Subsidiary or of all or any substantial part of the assets, domestic or
foreign, of the Borrower or any Subsidiary,


 


and
such case or proceeding shall continue undismissed or unstayed for a period of
60 consecutive calendar days, or an order granting the relief requested in such
case or proceeding against the Borrower or any Subsidiary (including, but not
limited to, an order for relief under such federal bankruptcy laws) shall be
entered.


 


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(h)           Failure of Agreements.  Any material provision of this Agreement, or
of any other Loan Document after delivery thereof hereunder, shall for any
reason cease to be valid and binding on the Borrower or Rauch, other than a
nonmaterial provision rendered unenforceable by operation of law, or the
Borrower or Rauch shall so state in writing, or this Agreement or any other
Loan Document, after delivery thereof hereunder, shall for any reason (other
than any action taken independently by the Administrative Agent or a Lender and
except to the extent permitted by the terms thereof) cease to create a valid,
perfected and, except as otherwise expressly permitted herein, first priority
Lien on, or security interest in, any of the Collateral purported to be covered
thereby and, in each case, such condition shall continue to exist for 10 days
after written notice thereof has been given to the Borrower by the
Administrative Agent.


 


(i)            Judgment.  A final judgment or order for the payment of
money, not covered by insurance, which when aggregated with all other such
judgments or orders, warrants, writs of attachment, execution or similar
process described in Section 12.1(k)
below, exceeds $500,000 in amount, shall be entered against the Borrower or any
Subsidiary by any court and such judgment or order shall continue undischarged,
unpaid or unstayed for 60 days.


 


(j)            Attachment.  A warrant or writ of attachment or execution
or similar process, which when aggregated with all other such warrants, writs
of attachment, execution or similar process and judgments and orders for the
payment of money described in Section 12.1(j)
above, exceeds $500,000, shall be issued against any property of the Borrower
or any Subsidiary and such warrant or process shall continue undischarged or
unstayed for 60 days.


 


(k)           ERISA.  Any ERISA Event shall occur and the Required Lenders determine
in good faith that such occurrence is reasonably likely to have a Materially
Adverse Effect.


 


(l)            Loan Documents.  Any “Event of Default” under any other Loan
Document shall occur or the Borrower or any Subsidiary shall default in the
performance or observance of any material term, covenant, condition or
agreement contained in, or the payment of any other sum covenanted to be paid
by the Borrower or any Subsidiary under, any such Loan Document.


 


(m)          Change of Control.  (i) the Borrower shall cease to own,
directly or indirectly, 100% of the capital stock of each of its Subsidiaries
or (ii) a “Change of Control,” as defined in the Senior Note Indenture, shall
occur or (iii) prior to a primary offering by the Borrower of equity securities
that produces at least $35,000,000 in net proceeds to the Borrower, (A) Lee
Affiliates shall have ceased to control (including by a proxy granted to them
or any of them by the registered owner thereof or other voting agreement
satisfactory to the Administrative Agent in its reasonable business judgment),
at least a majority of the outstanding voting stock of the Borrower or (B) Lee
Affiliates shall not have the ability to elect at least a majority of the members
of the Board of Directors of the Borrower or (C) Lee Affiliates shall have sold
more than 50% of the shares of capital stock of the Borrower owned by them or
(iv) at any time after the effective date, any person (as such term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), other
than Lee Affiliates and E. Merle Randolph, becomes the “beneficial owner” (as
such term is defined in Rule 13d-3 and Rule 13d-5 under said Securities
Exchange Act, except that a person shall be deemed to have “beneficial
ownership” of


 


85

















 


all securities
that such person has the right to acquire, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent condition),
directly or indirectly, of more than 35% of the voting capital stock of the
Borrower (measured by voting power, rather than by number of shares).


 


(n)           Change in Chairman or Principal
Officers.  Either of Robert Meers or
Gregory W. Hunt shall cease to be actively involved in the management of the
Borrower in substantially his present capacity, and a replacement for him,
satisfactory in their reasonable judgment to the Required Lenders, shall not
have been appointed or elected within 90 days thereafter.


 


Section 12.2           Remedies.


 


(a)           Automatic Acceleration and
Termination of Facilities.  Upon the
occurrence of an Event of Default specified in Section 12.1(f) or (g),
(i) the principal of and the interest on the Loans and the Notes at the
time outstanding, and all other amounts owed to the Administrative Agent and
the Lenders under this Agreement or any of the Loan Documents and all other
Secured Obligations, shall thereupon become due and payable without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in this Agreement or any of the Loan Documents to
the contrary notwithstanding, and (ii) the Revolving Credit Facility and
the right of the Borrower to request borrowings and Letters of Credit under
this Agreement shall immediately terminate.


 


(b)           Other Remedies.  If any Event of Default shall have occurred
and be continuing, the Administrative Agent may, and at the request of the
Required Lenders shall, do any of the following:


 


(i)            declare the
principal of and interest on the Loans and the Notes at the time outstanding,
and all other amounts owed to the Administrative Agent or any Lender under this
Agreement or any of the Loan Documents and all other Secured Obligations, to be
forthwith due and payable, whereupon the same shall immediately become due and
payable without presentment, demand, protest or other notice of any kind, all
of which are expressly waived, anything in this Agreement or the Loan Documents
to the contrary notwithstanding;


 


(ii)           terminate the
Revolving Credit Facility and any right of the Borrower to request borrowings
and Letters of Credit hereunder;


 


(iii)          notify, or request
the Borrower to notify, in writing or otherwise, any Account Debtor or obligor
with respect to any one or more of the Receivables to make payment to the
Administrative Agent or any agent or designee of the Administrative Agent, at
such address as may be specified by the Administrative Agent, and, if,
notwithstanding the giving of any notice, any Account Debtor or other such
obligor shall make payments to the Borrower, the Borrower shall hold all such
payments it receives in trust for the Administrative Agent, without commingling
the same with other funds or property of, or held by, the Borrower and shall
deliver the same to the Administrative Agent or any such agent or designee
immediately upon receipt by the Borrower in the identical form received,
together with any necessary endorsements;


 


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(iv)          settle or adjust disputes
and claims directly with Account Debtors and other obligors on Receivables for
amounts and on terms which the Administrative Agent considers advisable and in
all such cases only the net amounts received by the Administrative Agent in
payment of such amounts, after deductions of costs and attorneys’ fees, shall
constitute Collateral, and the Borrower shall have no further right to make any
such settlements or adjustments or to accept any returns of merchandise;


 


(v)           enter upon any
premises on which Inventory may be located and, without resistance or
interference by the Borrower, take physical possession of any or all thereof
and maintain such possession on such premises or move the same or any part
thereof to such other place or places as the Administrative Agent shall choose,
without being liable to the Borrower on account of any loss, damage or
depreciation that may occur as a result thereof, so long as the Administrative
Agent shall act reasonably and in good faith;


 


(vi)          require the Borrower
to and the Borrower shall, without charge to the Administrative Agent, assemble
the Inventory and maintain or deliver it into the possession of the
Administrative Agent or any agent or representative of the Administrative Agent
at such place or places as the Administrative Agent may designate;


 


(vii)         at the expense of
the Borrower, cause any of the Inventory to be placed in a public or field
warehouse, and the Administrative Agent shall not be liable to the Borrower on
account of any loss, damage or depreciation that may occur as a result thereof,
so long as the Administrative Agent shall act reasonably and in good faith;


 


(viii)        without notice,
demand or other process, and without payment of any rent or any other charge,
enter any of the Borrower’s premises and, without breach of the peace, until
the Administrative Agent completes the enforcement of its rights in the
Collateral, take possession of such premises or place custodians in exclusive
control thereof, remain on such premises and use the same and any of the
Borrower’s equipment, for the purpose of (A) completing any work in
process, preparing any Inventory for disposition and disposing thereof, and
(B) collecting any Receivable, and the Administrative Agent and the
Lenders are hereby granted a non-exclusive license or sublicense and all other
rights as may be necessary, appropriate or desirable to use the Proprietary
Rights in connection with the foregoing, and the rights of the Borrower under
all licenses and franchise agreements shall inure to the Administrative Agent’s
benefit (provided, however, that any use of any federally registered trademarks
as to any goods shall be subject to the control as to the quality of such goods
of the owner of such trademarks and the goodwill of the business symbolized
thereby);


 


(ix)           exercise any and
all of its rights under any and all of the Security Documents;


 


(x)            apply any cash
Collateral to the payment of the Secured Obligations in any order in which the
Administrative Agent may elect or use such cash in connection with the exercise
of any of its other rights hereunder or under any of the Security Documents;


 


(xi)           establish or cause
to be established one or more Lockboxes or other arrangement for the deposit of
proceeds of Receivables, and, in such case, the Borrower


 


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shall cause to
be forwarded to the Administrative Agent at the Administrative Agent’s Office,
on a daily basis, copies of all checks and other items of payment and deposit
slips related thereto deposited in such Lockboxes, together with collection
reports in form and substance satisfactory to the Administrative Agent; and


 


(xii)          exercise all of the
rights and remedies of a secured party under the UCC and under any other
Applicable Law, including, without limitation, the right, without notice except
as specified below and with or without taking the possession thereof, to sell
the Collateral or any part thereof in one or more parcels at public or private
sale, at any location chosen by the Administrative Agent, for cash, on credit
or for future delivery and at such price or prices and upon such other terms as
the Administrative Agent may deem commercially reasonable.  The Borrower agrees that, to the extent
notice of sale shall be required by law, at least 10 days’ notice to the
Borrower of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification, but notice
given in any other reasonable manner or at any other reasonable time shall also
constitute reasonable notification.  The
Administrative Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given.  The Administrative Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which
it was so adjourned.


 


Section 12.3           Application
of Proceeds.  Except as otherwise
provided by Applicable Law, all proceeds from each sale of, or other
realization upon, all or any part of the Collateral following an Event of
Default shall be applied or paid over as follows:


 


(a)           First:  to the payment of all costs and expenses
incurred in connection with such sale or other realization, including
attorneys’ fees,


 


(b)           Second:  to the payment of the Secured Obligations
(with the Borrower remaining liable for any deficiency) in accordance with the
provisions of Section 4.8(d),
provided that, without the consent
of the Lenders, principal of Revolving Credit Loans shall not be repaid before
all interest accrued and unpaid on such Loans has been paid, and


 


(c)           Third:  the balance (if any) of such proceeds shall
be paid to the Borrower or, subject to any duty imposed by law or otherwise, to
whomsoever is entitled thereto.


 


The
Borrower shall remain liable and will pay, on demand, any deficiency remaining
in respect of the Secured Obligations, together with interest thereon at a rate
per annum equal to the highest rate then payable hereunder on such Secured
Obligations, which interest shall constitute part of the Secured Obligations.


 


Section 12.4           Power
of Attorney.  In addition to the
authorizations granted to the Administrative Agent under Section 8.15 or under any other
provision of this Agreement or any of the Loan Documents, upon and after an
Event of Default, the Borrower hereby irrevocably designates, makes,
constitutes and appoints the Administrative Agent (and all Persons designated
by the Administrative Agent from time to time) as the Borrower’s true and
lawful attorney and agent in fact, and the Administrative Agent or any agent of
the Administrative Agent may, without notice to the Borrower, and at such time
or times as the Administrative Agent or any


 


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such agent in
its sole discretion may determine, in the name of the Borrower, the Lenders or
the Administrative Agent,


 


(a)           demand payment of the Receivables,


 


(b)           enforce payment of the Receivables by
legal proceedings or otherwise,


 


(c)           exercise all of the Borrower’s rights
and remedies with respect to the collection of Receivables,


 


(d)           settle, adjust, compromise, extend or
renew any or all of the Receivables,


 


(e)           settle, adjust or compromise any
legal proceedings brought to collect the Receivables,


 


(f)            discharge and release the
Receivables or any of them,


 


(g)           prepare, file and sign the name of
the Borrower on any proof of claim in bankruptcy or any similar document
against any Account Debtor,


 


(h)           prepare, file and sign the name of
the Borrower on any notice of Lien, assignment or satisfaction of Lien or
similar document in connection with any of the Collateral,


 


(i)            endorse the name of the Borrower
upon any chattel paper, document, instrument, notice, freight bill, bill of
lading or similar document or agreement relating to the Receivables, the
Inventory or any other Collateral,


 


(j)            use the stationery of the Borrower
and sign the name of the Borrower to verifications of the Receivables and on
any notice to the Account Debtors,


 


(k)           open the Borrower’s mail,


 


(l)            notify the post office authorities
to change the address for delivery of the Borrower’s mail to an address
designated by the Administrative Agent, and


 


(m)          use the information recorded on or
contained in any data processing equipment and computer hardware and software
relating to the Receivables, Inventory or other Collateral to which the
Borrower or any Subsidiary has access.


 


Section 12.5           Miscellaneous
Provisions Concerning Remedies.


 


(a)           Rights Cumulative.  The rights and remedies of the
Administrative Agent and the Lenders under this Agreement, the Notes and each
of the Loan Documents shall be cumulative and not exclusive of any rights or
remedies which it would otherwise have. 
In exercising such rights and remedies, the Administrative Agent may be
selective and no failure or delay by the Administrative Agent or any Lender in
exercising any right shall operate as a waiver of such right nor shall any
single or partial exercise of any power or right preclude its other or further
exercise or the exercise of any other power or right.


 


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(b)           Waiver of Marshalling.  The Borrower hereby waives any right to
require any marshalling of assets and any similar right.


 


(c)           Limitation of Liability.  Nothing contained in this Article 12 or elsewhere in this Agreement
or in any of the Loan Documents shall be construed as requiring or obligating
the Administrative Agent or any agent or designee of the Administrative Agent
to make any demand or to make any inquiry as to the nature or sufficiency of
any payment received by it or to present or file any claim or notice or take
any action with respect to any Receivable or any other Collateral or the moneys
due or to become due thereunder or in connection therewith or to take any steps
necessary to preserve any rights against prior parties, and neither the
Administrative Agent nor any of its agents or designees nor any Lender shall
have any liability to the Borrower for actions taken pursuant to this Article 12, any other provision of
this Agreement or any of the Loan Documents, so long as the Administrative
Agent or such agent or designee shall act reasonably and in good faith.


 


(d)           Appointment of Receiver.  In any action under this Article 12, the Administrative Agent shall
be entitled to the appointment of a receiver, to the extent permitted by
Applicable Law, without notice of any kind whatsoever, to take possession of
all or any portion of the Collateral and to exercise such power as the court shall
confer upon such receiver.


 


Section 12.6           Proprietary
Rights License.  The Borrower hereby
grants to the Administrative Agent the nonexclusive right and license to use
the Proprietary Rights of the Borrower for the purposes set forth in Section 12.2(b) and for the purpose of
enabling the Administrative Agent to process and realize on the Collateral and
to permit any purchaser of any portion of the Collateral through a foreclosure
sale or any other exercise of the Administrative Agent’s and the Lenders’ rights
and remedies under this Agreement and the other Security Documents to use, sell
or otherwise dispose of the Collateral. 
Such right and license is granted free of charge, without the
requirement that any monetary payment whatsoever be made to the Borrower or any
other Person by the Administrative Agent or any purchaser or purchasers of the
Collateral.  The Borrower hereby
represents, warrants, covenants and agrees that it presently has, and shall
continue to have, the right, without the approval or consent of others, to
grant the license set forth in this Section
12.6, and the Borrower hereby consents to the granting of such
license.


 


ARTICLE 13


 


ASSIGNMENTS


 


Section 13.1           Successors
and Assigns; Participations.


 


(a)           This Agreement shall be binding upon
and inure to the benefit of the Borrower, the Lenders, the Administrative
Agent, all future holders of the Notes, and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its rights
or obligations under this Agreement (other than pursuant to a transaction
permitted by the provisions of Section 11.7)
without the prior written consent of each Lender.


 


(b)           Each Lender may, with the prior
consent of the Administrative Agent and (so long as no Default or Event of Default
shall have occurred and be continuing) of the


 


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Borrower
(which consent will not be unreasonably withheld or delayed), or without
consent as part of a sale of all or substantially all of such Lender’s assets
of a similar type or in respect of a sale of such Lender’s entire interest
hereunder to any Affiliate of such Lender that is an Eligible Assignee, assign
to one or more Eligible Assignees all or a portion of its interests, rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Loans at the time owing to it and the Notes held by it); provided, however, that (i) each such
assignment shall be of a constant and not a varying percentage of all the
assigning Lender’s rights and obligations under this Agreement, (ii) the
amount of the Commitment of the assigning Lender that is subject to each such
assignment, made to a Person that is not a Lender other than by reason of such
assignment, shall not be less than $10,000,000 (or the entire remaining
Commitment of the assigning Lender, if less), (iii) in the case of a partial
assignment, the amount of the Commitment that is retained by the assigning
Lender (determined as of the date the Assignment and Acceptance with respect to
such assignment is delivered to the Administrative Agent) shall in no event be
less than $10,000,000, (iv) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register an Assignment and Acceptance, together with any Note
or Notes subject to such assignment, (v) such assignment shall not,
without the consent of the Borrower, require the Borrower to file a
registration statement with the SEC or apply to or qualify the Loans or the
Notes under the blue sky laws of any state, and (vi) the representation
contained in Section 13.2 hereof
shall be true with respect to any such proposed assignee.  Upon such execution, delivery, acceptance
and recording, from and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least five Business Days after
the execution thereof, (A) the assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder, and (B) the Lender assignor
thereunder shall, to the extent provided in such assignment, be released from
its obligations under this Agreement.


 


(c)           By executing and delivering an
Assignment and Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
follows:  (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such
Lender assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement
or any other instrument or document furnished pursuant hereto; (ii) such
Lender assignor makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under this Agreement or
any other instrument or document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section 6.1(m) and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Administrative Agent, such Lender
assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other Loan Documents
as are delegated to the Administrative


 


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Agent by the
terms hereof and thereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.


 


(d)           The Administrative Agent shall
maintain a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders and the
Commitment and Proportionate Share of, and principal amount of the Loans and
other Secured Obligations owing to, each Lender from time to time (the Register).  The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders may treat each
person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement.  The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.


 


(e)           Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Note or Notes subject to such assignment and in the case of an
Eligible Assignee which is not an Affiliate of a Lender, a fee in an amount
equal to $3,500, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in the form of Exhibit D, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register,
(iii) give prompt notice thereof to the Lenders and the Borrower, and
(iv) promptly deliver a copy of such Acceptance and Assignment to the
Borrower.  Within five Business Days
after receipt of notice, the Borrower shall execute and deliver to the
Administrative Agent in exchange for the surrendered Note or Notes a new Note
or Notes to the order of such Eligible Assignee in amounts equal to the
Commitment assumed by such Eligible Assignee pursuant to such Assignment and
Acceptance and a new Note or Notes to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder.  Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of the assigned
Notes.  Each surrendered Note or Notes
shall be canceled and returned to the Borrower.


 


(f)            Each Lender may sell participations
to one or more banks or other entities in all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment hereunder and the Loans owing to it and the Notes held by it); provided, however, that (i) each such
participation shall be in an amount not less than $5,000,000, (ii) such
Lender’s obligations under this Agreement (including, without limitation, its
Commitment hereunder) shall remain unchanged, (iii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iv) such Lender shall remain the holder of the Notes
held by it for all purposes of this Agreement, (v) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement, provided,
that such Lender may agree with any participant that such Lender will not,
without such participant’s consent, agree to or approve any waivers or
amendments which would reduce the principal of or the interest rate on any
Loans, extend the term or increase the amount of the commitments of such
participant, reduce the amount of any fees to which such participant is
entitled, extend any scheduled payment date for principal or release Collateral


 


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securing the
Loans (other than Collateral disposed of pursuant to Section 8.6 hereof or otherwise in accordance with the terms
of this Agreement or the Security Documents), and (vi) any such
disposition shall not, without the consent of the Borrower, require the
Borrower to file a registration statement with the SEC or to apply to qualify
the Loans or the Notes under the blue sky laws of any state.  Any Lender selling a participation to any
bank or other entity that is not an Affiliate of such Lender shall give prompt
notice thereof to the Borrower.


 


(g)           Any Lender may, in connection with
any assignment, proposed assignment, participation or proposed participation
pursuant to this Section 13.1,
disclose to the assignee, participant, proposed assignee or proposed
participant, any information relating to the Borrower and its Subsidiaries
furnished to such Lender by or on behalf of the Borrower or its Subsidiaries.


 


(h)           Any Lender may pledge the Note
payable to its order to the applicable Federal Reserve Bank.


 


Section 13.2           Representation
of Lenders.  Each Lender hereby
represents that it will make each Loan hereunder as a commercial loan for its
own account in the ordinary course of its business; provided, however, that subject to Section 13.1 hereof, the disposition of the Notes or other
evidence of the Secured Obligations held by any Lender shall at all times be
within its exclusive control.


 


Section 13.3           Non-U.S.
Lenders.  Prior to the Agreement
Date or, with respect to any Lender that becomes a Lender after the Agreement
Date, prior to the “Effective Date” of the Assignment and Acceptance pursuant
to which such Lender becomes a Lender, each Lender which is not incorporated
under the laws of the United States of America or a state thereof agrees that
it will deliver to the Administrative Agent (i) a letter in duplicate and two
duly completed copies of United States Internal Revenue Service Form 1001 or
4224 or successor applicable form, as the case may be, certifying in each case
that such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, and (ii) an
Internal Revenue Service Form W-8 or W-9 or successor applicable form, as the case
may be, to establish an exemption from United States backup withholding
tax.  Each such Lender which delivers a
copy of a Form 1001 or 4224 and Form W-8 or W-9 pursuant to the next preceding
sentence further undertakes to deliver to the Administrative Agent two further
copies of the said letter and Form 1001 or 4224 and Form W-8 or W-9, or
successor applicable forms, or other manner of certification, as the case may
be, on or before the date that any such letter or form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent letter and form previously delivered by it to the Administrative Agent,
and such extensions or renewals thereof as may reasonably be requested by the
Administrative Agent, certifying in the case of a Form 1001 or 4224 that such
Lender is entitled to receive payments under this Agreement without deduction
or withholding of any United States federal income taxes, unless in any such
case an event (including without limitation any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such letter or form
with respect to it and such Lender advises the Administrative Agent that it is
not capable of receiving payments without any deduction or withholding of
United States federal income tax, and in the case of a Form W-8 or W-9,
establishing an exemption from United States backup withholding tax, in which
case, all


 


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payments by
the Borrower hereunder and under any Note shall be increased by the amount
necessary to pay to such Lender, net of any such withholding tax(es) the amount
of each payment provided for hereunder.


 


ARTICLE 14


 


ADMINISTRATIVE AGENT


 


Section 14.1           Appointment
of Agent.  Each of the Lenders
hereby irrevocably designates and appoints Bank of America, N.A. as the
Administrative Agent of such Lender under this Agreement and the other Loan
Documents, and each Lender irrevocably authorizes the Administrative Agent, as
the Administrative Agent for such Lender, to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and such other Loan
Documents, including, without limitation, to make determinations as to the
eligibility of Inventory and Receivables and to adjust the advance rates
contained in the definition “Borrowing Base” (so long as such advance rates, as
adjusted, do not exceed those set forth in the definition “Borrowing Base”) and
to establish reserves against the Borrowing Base, together with such other
powers as are reasonably incidental thereto. 
Notwithstanding any provision to the contrary elsewhere in this
Agreement or the other Loan Documents, the Administrative Agent shall not have
any duties or responsibilities, except those expressly set forth herein and
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or the other Loan Documents or otherwise
exist against the Administrative Agent.


 


Section 14.2           Delegation
of Duties.  The Administrative Agent
may execute any of its duties under this Agreement and the other Loan Documents
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties.  The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.


 


Section 14.3           Exculpatory
Provisions.  Neither the
Administrative Agent nor any of its trustees, officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (i) liable to any Lender
(or any Lender’s participants) for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or the
other Loan Documents (except for its or such Person’s own gross negligence or
willful misconduct), or (ii) responsible in any manner to any Lender (or
any Lender’s participants) for any recitals, statements, representations or
warranties made by the Borrower or any officer thereof contained in this
Agreement or the other Loan Documents or in any certificate, report, statement
or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or the other
Loan Documents or for the existence, value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the other Loan
Documents or any Collateral or Lien or other interest therein or for any
failure of the Borrower to perform its obligations hereunder or
thereunder.  The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records
of the Borrower, provided that the
Administrative Agent


 


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shall perform
a field examination of the Collateral, in accordance with the Administrative
Agent’s customary standards and practices for such examinations, at least
annually and shall make the results thereof available to the Lenders.


 


Section 14.4           Reliance
by Agent.  The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent.  The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless such Note shall have been transferred in
accordance with Section 13.1.  The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement and
the other Loan Documents unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and shall be indemnified
to its satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action.  The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the Notes in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the Notes.


 


Section 14.5           Notice
of Default.  The Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless the Administrative Agent has
received notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
“notice of default” or the Lender that is the Administrative Agent (which is
Bank of America on the Effective Date) has actual knowledge of such Default or
Event of Default, in which case the Administrative Agent shall be deemed to
have received such a notice.  In the
event that the Administrative Agent receives or is deemed to have received such
a notice, the Administrative Agent shall promptly give notice thereof to the
Lenders.  The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided
that unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
continue making Revolving Credit Loans to the Borrower on behalf of the Lenders
in reliance on and subject to the provisions of Section 4.7 and take such other action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.


 


Section 14.6           Non-Reliance
on Agents and Other Lenders.  Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its respective officers, directors, counsel, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to
it and that no act by the Administrative Agent thereafter taken, including any
review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender.  Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business,


 


95

















 


operations,
property, financial (and other) condition and creditworthiness of the Borrower
and made its own decision to make its Loans hereunder and enter into this
Agreement.  Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
(and other) condition and creditworthiness of the Borrower.  Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder or under the other Loan Documents, the Administrative Agent shall
have no duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, financial (and
other) condition or creditworthiness of the Borrower which may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.


 


Section 14.7           Indemnification.  The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting any obligation of the Borrower to do so),
ratably according to their respective Commitment Percentages, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Notes) be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement or
the other Loan Documents, or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Administrative Agent under or in connection with
any of the foregoing; provided that
no Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the Administrative Agent’s
gross negligence or willful misconduct or resulting solely from transactions or
occurrences that occur at a time after the “Effective Date” of any assignment
by such Lender of all of its interests, rights and obligations under this
Agreement pursuant to Section 13.1
or, in the case of a Lender to which an assignment is made hereunder pursuant
to Section 13.1, at a time before
the “Effective Date” of any such assignment. 
The agreements in this subsection shall survive the payment of the
Notes, the Secured Obligations and all other amounts payable hereunder and the
termination of this Agreement.


 


Section 14.8           Agent
in Its Individual Capacity.  The
institution at the time acting as the Administrative Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower and its Subsidiaries as if it were not the
Administrative Agent hereunder.  With
respect to its Commitment, the Loans made or renewed by it, any Note issued to
it and any Letter of Credit issued by it, such institution shall have and may
exercise the same rights and powers under this Agreement and the other Loan
Documents and shall be subject to the same obligations and liabilities as and
to the extent set forth herein and in the other Loan Documents for any other
Lender.  The terms “Lenders” and
“Required Lenders” or any other term shall, unless the context clearly
otherwise indicates, include such institution in its individual capacity as a
Lender or one of the Required Lenders.


 


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Section 14.9           Successor
Agent.  The Administrative Agent may
resign as Administrative Agent upon 10 days’ notice to the Lenders and, if the
Commitment Percentage of the Lender that is the Administrative Agent has been
reduced to less than 10%, may be removed by a vote of the Required
Lenders.  Any such resignation shall be
effective on the date specified in the Administrative Agent’s notice of
resignation, provided that if no
successor agent has been appointed in accordance with the provisions of this Section 14.9 on or before such date, such
effective date may be extended until a successor has been so appointed, but not
for more than 30 days; and any such removal shall be effective upon the
appointment of a successor agent in accordance with the provisions of this Section 14.9.  If the Administrative Agent resigns or is removed as
Administrative Agent under this Agreement, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, subject, so
long as no Default or Event of Default has occurred and is continuing, to the
Borrower’s approval (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers
and duties of the Administrative Agent, and the term “Administrative Agent”
shall mean such successor agent effective upon its appointment, and the former
Administrative Agent’s rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Notes.  After any
retiring or removed Administrative Agent’s resignation or removal hereunder as
Administrative Agent becomes effective, the provisions of Section 14.7 shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement.


 


Section 14.10         Notices
from Agent to Lenders.  The
Administrative Agent shall promptly, upon receipt thereof, forward to each
Lender copies of any written notices or reports supplied to it by the Borrower
(but which the Borrower is not required to supply directly to the Lenders) and
of reports furnished by Bank of America pursuant to Section 3.4(c).


 


ARTICLE 15


 


MISCELLANEOUS


 


Section 15.1           Notices.


 


(a)           Method of Communication.  Except as specifically provided in this
Agreement or in any of the Loan Documents, all notices and the communications
hereunder and thereunder shall be in writing or by telephone subsequently
confirmed in writing.  Notices in
writing shall be delivered personally or sent by certified or registered mail,
postage pre-paid, or by overnight courier, or by telegraph, telex or facsimile
transmission and shall be deemed received, in the case of personal delivery,
when delivered, in the case of mailing, on the third Business Day after
mailing, in the case of overnight courier, on the Business Day following timely
delivery to such courier, in the case of telegraph, on the day after delivery
to the telegraph office and, in the case of telex or facsimile transmission,
upon transmittal; provided that in
the case of notices to the Administrative Agent pursuant to Articles 2 and 3, the Administrative Agent shall be charged with knowledge of
the contents thereof only when such notice is actually received by the
Administrative Agent.  A telephonic
notice to the Administrative Agent as understood by the Administrative Agent
will be deemed to be the controlling and proper notice in the event of a
discrepancy with or failure to receive a confirming written notice.


 


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(b)           Addresses for Notices.  Notices to any party shall be sent to it at
the following addresses, or any other address of which all the other parties
are notified in writing.


 


	
  If to the Borrower:

  	
   

  	
  Syratech Corporation

  175 McClellan Highway

  East Boston, Massachusetts 02128

  Attention:  Gregory W. Hunt

  Facsimile No.:  (617) 568-8178

  
	
   

  	
   

  	
   

  
	
  With copies to:

  	
   

  	
  Faye A. Florence, Esq.

  Secretary and General Counsel

  Syratech Corporation

  175 McClellan Highway

  East Boston, Massachusetts 02128

  Facsimile No.:  (617) 568-8178

  
	
   

  	
   

  	
   

  
	
  If to the Administrative Agent:

  	
   

  	
  Bank of America, N.A.

  600 Peachtree Street, N.E.

  5th Floor

  Atlanta, Georgia 30308

  Attention:  Andrew A. Doherty

  Facsimile No.:  (404) 607-6439

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Hunton & Williams LLP

  600 Peachtree Street, N.E.

  Suite 4100

  Atlanta, Georgia 30308

  Attention:  John B. Miller, Jr., Esq.

  Facsimile No.:  (404) 888-4190

  
	
   

  	
   

  	
   

  
	
  If to any Lender:

  	
   

  	
  At such Lender’s address appearing on the signature pages hereof or
  on the signature pages to any agreement pursuant to which any Person becomes
  a Lender.

  



 


(c)           Agent’s Office.  The Administrative Agent hereby designates
its office located at 600 Peachtree Street, 13th Floor, Atlanta,
Georgia 30308, or any subsequent office which shall have been specified for
such purpose by written notice to the Borrowers and the Lenders, as the office
to which payments due are to be made and at which Loans will be disbursed.


 


Section 15.2           Expenses.  The Borrower agrees, to pay or reimburse on
demand all costs and expenses incurred by the Administrative Agent (and, as to subsections (a), (b), (g) and (h),
the Administrative Agent and the Lenders), including, without limitation, the
reasonable fees and disbursements of counsel, in connection with:


 


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(a)           the negotiation, preparation,
execution, delivery, administration, enforcement and termination of this
Agreement and each of the other Loan Documents, whenever the same shall be
executed and delivered, including, without limitation:


 


(i)            the out-of-pocket
costs and expenses incurred in connection with the administration and
interpretation of this Agreement and the other Loan Documents;


 


(ii)           the costs and
expenses of Field Exams including travel expenses and per diem charges (currently $775) for each employee or agent
of the Administrative Agent engaged in such Field Exams;


 


(iii)          the costs and
expenses of appraisals of the Collateral;


 


(iv)          the costs and
expenses of lien searches;


 


(v)           taxes, fees and
other charges for filing the Financing Statements and continuations and the
costs and expenses of taking other actions to perfect, protect, and continue
the Security Interest;


 


(b)           as to the preparation, execution and
delivery of any waiver, amendment, supplement or consent by the Administrative
Agent and the Lenders relating to this Agreement or any of the Loan Documents,
including, without limitation, costs for travel, lodging and meals of
representatives of the Lenders in connection therewith;


 


(c)           sums paid or incurred to pay any
amount or take any action required of the Borrower under the Loan Documents
that the Borrower fails to pay or take;


 


(d)           costs of inspections and
verifications of the Collateral, including, without limitation, standard per
diem fees charged by the Administrative Agent, travel, lodging, and meals for
inspections of the Collateral and the Borrower’s operations and books and
records by the Administrative Agent’s agents up to four times per year and
whenever an Event of Default exists;


 


(e)           costs and expenses of forwarding loan
proceeds, collecting checks and other items of payment, and establishing and
maintaining each Controlled Disbursement Account, Agency Account and Lockbox;


 


(f)            costs and expenses of preserving and
protecting the Collateral;


 


(g)           consulting, after the occurrence of a
Default, with one or more Persons, including financial consultants, appraisers,
accountants and lawyers, concerning the value of any Collateral for the Secured
Obligations or the business of the Borrower or related to the nature, scope or
value of any right or remedy of the Administrative Agent or any Lender
hereunder or under any of the Loan Documents, including any review of factual
matters in connection therewith, which expenses shall include the fees and
disbursements of such Persons; and


 


(h)           costs and expenses paid or incurred
to obtain payment of the Secured Obligations, enforce the Security Interest,
sell or otherwise realize upon the Collateral, and otherwise enforce the
provisions of the Loan Documents, or to prosecute or defend any claim in


 


99

















 


any way
arising out of, related to or connected with, this Agreement or any of the Loan
Documents, which expenses shall include the reasonable fees and disbursements
of counsel and of experts and other consultants retained by the Administrative
Agent or any Lender.


 


The
foregoing shall not be construed to limit any other provisions of the Loan
Documents regarding costs and expenses to be paid by the Borrower.  The Borrower hereby authorizes the Administrative
Agent and the Lenders to debit the Borrower’s Loan Accounts (by increasing the
principal amount of the Revolving Credit Loan) in the amount of any such costs
and expenses owed by the Borrower when due.


 


Section 15.3           Stamp
and Other Taxes.  The Borrower will
pay any and all stamp, registration, recordation and similar taxes, fees or
charges and shall indemnify the Administrative Agent and the Lenders against
any and all liabilities with respect to or resulting from any delay in the
payment or omission to pay any such taxes, fees or charges, which may be
payable or determined to be payable in connection with the execution, delivery,
performance or enforcement of this Agreement and any of the Loan Documents or
the perfection of any rights or security interest thereunder, including,
without limitation, the Security Interest.


 


Section 15.4           Setoff.  In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
during the continuance of any Default or Event of Default, each Lender, any
participant with such Lender in the Loans and each Affiliate of each Lender are
hereby authorized by the Borrower at any time or from time to time, without
notice to the Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness at any time held or owing by any Lender or any Affiliate of
any Lender or any participant to or for the credit or the account of the
Borrower against and on account of the Secured Obligations irrespective or
whether or not


 


(a)           the Administrative Agent or such
Lender shall have made any demand under this Agreement or any of the Loan
Documents, or


 


(b)           the Administrative Agent or such
Lender shall have declared any or all of the Secured Obligations to be due and
payable as permitted by Section 12.2
and although such Secured Obligations shall be contingent or unmatured.


 


Section 15.5           Governing
Law; Choice of Forum; Service of Process.


 


(a)           THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES
HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICT OF LAWS PROVISIONS, PROVIDED THAT PERFECTION ISSUES WITH RESPECT TO
ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT OF LAW
RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF THE STATE OF GEORGIA; PROVIDED THAT
THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.


 


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(b)           ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF GEORGIA OR OF THE UNITED STATES OF AMERICA LOCATED IN
FULTON COUNTY, GEORGIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
OF THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS CONSENTS, FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS.  EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY
DOCUMENT RELATED HERETO. 
NOTWITHSTANDING THE FOREGOING: 
(1) THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL HAVE THE RIGHT TO
BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ITS PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTION THE ADMINISTRATIVE AGENT OR THE LENDERS DEEM
NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER
SECURITY FOR THE OBLIGATIONS AND (2) EACH OF THE PARTIES HERETO ACKNOWLEDGES
THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING
SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.


 


(c)           THE BORROWER HEREBY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO
THE BORROWER AT ITS ADDRESS SET FORTH IN SECTION 15.1 AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S.
MAILS POSTAGE PREPAID.  NOTHING
CONTAINED HEREIN SHALL AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR THE LENDERS
TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.


 


Section 15.6           WAIVER
OF JURY TRIAL.  THE BORROWER, THE
LENDERS AND THE ADMINISTRATIVE AGENT EACH IRREVOCABLY WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
ANY ADMINISTRATIVE AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.  THE BORROWER, THE LENDERS AND THE
ADMINISTRATIVE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. 
WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS
TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE
OTHER LOAN


 


101

















 


DOCUMENTS OR
ANY PROVISION HEREOF OR THEREOF.  THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.


 


Section 15.7           Waiver
of Rights.  The Borrower hereby
acknowledges that the Secured Obligations arose out of a “Commercial
Transaction” as that term is defined in O.C.G.A. § 44-14-260(1) concerning
foreclosure of mortgages on personalty, and agrees that in the event of any
Default, the Administrative Agent shall have the right to an immediate writ of
possession without notice of hearing. 
The Borrower knowingly and intelligently waives any and all rights it
may have to any notice and posting of a bond by the Administrative Agent prior
to seizure by the Administrative Agent, its transferees, assigns or successors
in interest, of the Collateral or any portion thereof.  This is intended by the Borrower as a
“waiver” as that term is defined in O.C.G.A. § 44-14-260(3) relating to
foreclosure of mortgages on personalty.


 


Section 15.8           Reversal
of Payments.  The Administrative
Agent and each Lender shall have the continuing and exclusive right to apply,
reverse and re-apply any and all payments to any portion of the Secured
Obligations in a manner consistent with the terms of this Agreement.  To the extent the Borrower makes a payment
or payments to the Administrative Agent, for the account of the Lenders, or any
Lender receives any payment or proceeds of the Collateral for the Borrower’s
benefit, which payment(s) or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the Secured Obligations or
part thereof intended to be satisfied shall be revived and continued in full
force and effect, as if such payment or proceeds had not been received by the
Administrative Agent or such Lender.


 


Section 15.9           Accounting
Matters.  All financial and
accounting calculations, measurements and computations made for any purpose
relating to this Agreement, including, without limitation, all computations
utilized by the Borrower to determine whether it is in compliance with any
covenant contained herein, shall, unless there is an express written direction
by the Required Lenders to the contrary, be performed in accordance with GAAP.


 


Section 15.10         Amendments.  (a) Except as set forth in subsection (b) below, any term, covenant,
agreement or condition of this Agreement or any of the other Loan Documents may
be amended or waived, and any departure therefrom may be consented to by the
Required Lenders, if, but only if, such amendment, waiver or consent is in
writing signed by the Required Lenders and, in the case of an amendment (other
than an amendment described in Section
15.10(d)), by the Borrower, provided
that no such amendment, unless consented to by the Administrative Agent, shall
alter or affect the rights or responsibilities of the Administrative Agent, and
in any such event, the failure to observe, perform or discharge any such term,
covenant, agreement or condition (whether such amendment is executed or such
waiver or consent is given before or after such failure) shall not be construed
as a breach of such term, covenant, agreement or condition or as a Default or
an Event of Default.  Unless otherwise specified
in such waiver or consent, a waiver or consent given hereunder shall be
effective only in the specific instance and for the specific purpose for which
given.  In the event that any such
waiver or amendment is requested by the Borrower, the Administrative Agent and
the Lenders


 


102

















 


may require
and charge a fee in connection therewith and consideration thereof in such
amount as shall be determined by the Administrative Agent and the Required
Lenders in their discretion.


 


(b)           Without the prior unanimous written
consent of the Lenders,


 


(i)            no amendment,
consent or waiver shall (a) affect the amount or extend the time of the
obligation of any Lender to make Loans or (b) extend the originally scheduled time
or times of payment of the principal of any Loan or (c) alter the time or times
of payment of interest on any Loan or of any fees payable for the account of
the Lenders or (d) alter the amount of the principal of any Loan or decrease
the rate of interest thereon or (e) decrease the amount of any commitment fee
or other fee payable hereunder for the account of the Lenders or (f) permit any
subordination of the principal of or interest on any Loan or (g) permit the
subordination of the Security Interest in any Collateral,


 


(ii)           no Collateral
having an aggregate value greater than $500,000 shall be released by the
Administrative Agent in any 12-month period other than as specifically
permitted in this Agreement or the Security Documents nor shall any Collateral
be released at a time when the Administrative Agent is entitled to exercise
remedies hereunder upon default, nor shall the Borrower be released from
liability for the Secured Obligations,


 


(iii)          except to the
extent expressly provided in Sections 4.7
and 14.1, the definition
“Borrowing Base” shall not be amended,


 


(iv)          none of the
provisions of this Section 15.10,
of Section 4.8(d), of the
definitions “Lenders,” “Proportionate Share,” “Ratable Share” or “Required
Lenders” or, if it alters the effect of such definitions or other provisions
enumerated in this clause (iv), of
any other defined term used in such definitions or provisions, or the
provisions of Article 12 shall be
amended, and


 


(v)           neither the
Administrative Agent nor any Lender shall consent to any amendment to or waiver
of the amortization, deferral or subordination provisions of any instrument or
agreement evidencing or relating to obligations of the Borrower that are
expressly subordinated to any of the Secured Obligations if such amendment or
waiver would be adverse to the Lenders in their capacities as Lenders
hereunder;


 


provided,
however, that anything herein to the contrary
notwithstanding, the Required Lenders shall have the right to waive any Default
or Event of Default and the consequences hereunder of such Default or Event of
Default provided only that such Default or Event of Default does not arise
under Section 12.1(f)
or (g) or out of a breach of or failure to perform or observe any
term, covenant or condition of this Agreement or any other Loan Document (other
than the provisions of Article 12 of this Agreement) the amendment
of which requires the unanimous consent of the Lenders; and provided further,
that only the consent of the Lender providing the Bank Product shall be required
for amendments to or waivers under the documentation for such Bank
Product.  The Required Lenders shall
have the right, with respect to any Default or Event of Default that may be
waived by them, to enter into an agreement with the Borrower providing for the
forbearance from the exercise of any remedies provided hereunder or under the
other Loan Documents without thereby waiving any such Default or Event of
Default.


 


103

















 


(c)           The making of Loans hereunder by the
Lenders during the existence of a Default or Event of Default shall not be
deemed to constitute a waiver of such Default or Event of Default.


 


(d)           Notwithstanding any provision of this
Agreement or the other Loan Documents to the contrary, no consent, written or
otherwise, of the Borrower shall be necessary or required in connection with
any amendment to Article 14 or
Section 4.8, and any amendment to
such provisions may be effected solely by and among the Administrative Agent
and the Lenders, provided that no
such amendment shall impose any obligation on the Borrower.


 


Section 15.11         Performance
of Borrower’s Duties.


 


(a)           The Borrower’s obligations under this
Agreement and each of the Loan Documents shall be performed by the Borrower at
its sole cost and expense.


 


(b)           If the Borrower shall fail to do any
act or thing which it has covenanted to do under this Agreement or any of the
Loan Documents, the Administrative Agent may (but shall not be obligated to) do
the same or cause it to be done either in the name of the Administrative Agent,
in the name of the Lender(s) or in the name and on behalf of the Borrower, and
the Borrower hereby irrevocably authorizes the Administrative Agent so to act.


 


Section 15.12         Indemnification.  The Borrower agrees to reimburse the
Administrative Agent and each Lender for all reasonable costs and expenses,
including reasonable fees and disbursements of outside counsel or reasonable
allocations and disbursements of in-house counsel, incurred and to indemnify
and hold harmless the Administrative Agent and each Lender from and against all
losses suffered by the Administrative Agent or any Lender, other than losses
resulting from the Administrative Agent’s or such Lender’s gross negligence or
willful misconduct, in connection with


 


(a)           the exercise by the Administrative
Agent or any Lender of any right or remedy granted to it under this Agreement
or any of the Loan Documents,


 


(b)           any claim, and the prosecution or
defense thereof, arising out of or in any way connected with this Agreement or
any of the Loan Documents, except in the case of a dispute between the Borrower
and the Administrative Agent or any Lender in which the Borrower prevails in a
final unappealed or unappealable judgment, and


 


(c)           the collection or enforcement of the
Secured Obligations or any of them.


 


Section 15.13         All
Powers Coupled with Interest.  All
powers of attorney and other authorizations granted to the Administrative Agent
and the Lenders and any Persons designated by the Administrative Agent or the
Lenders pursuant to any provisions of this Agreement or any of the Loan
Documents shall be deemed coupled with an interest and shall be irrevocable so
long as any of the Secured Obligations remain unpaid or unsatisfied.  All powers of attorney and other authorizations
granted to the Administrative Agent and any Persons designated by the Lender
pursuant to any provisions of this Agreement or any of the Loan Documents shall
be deemed coupled with an interest and shall be irrevocable so long as any of
the Secured Obligations remain unpaid or unsatisfied or the Revolving Credit
Facility has not been terminated.


 


104

















 


Section 15.14         Survival.  Notwithstanding any termination of this
Agreement,


 


(a)           until all Secured Obligations have
been paid in full and the Revolving Credit Facility terminated, the
Administrative Agent shall retain its Security Interest and shall retain all
rights under this Agreement and each of the Security Documents with respect to
the Collateral as fully as though this Agreement had not been terminated, and


 


(b)           the indemnities to which the
Administrative Agent and the Lenders are entitled under the provisions of this Article 15 and any other provision of
this Agreement and the Loan Documents shall continue in full force and effect
and shall protect the Administrative Agent and the Lenders against events
arising after such termination as well as before, and


 


(c)           in connection with the termination of
this Agreement and the release and termination of the Security Interest, the
Administrative Agent, on behalf of itself as agent and the Lenders, may require
such assurances and indemnities as it shall reasonably deem necessary or
appropriate to protect the Administrative Agent and the Lenders against loss on
account of such release and termination, including, without limitation, with
respect to credits previously applied to the Secured Obligations that may
subsequently be reversed or revoked.


 


Section 15.15         Titles
and Captions.  Titles and captions
of Articles, Sections and subsections in this Agreement are for convenience
only and neither limit nor amplify the provisions of this Agreement.


 


Section 15.16         Severability
of Provisions.  Any provision of
this Agreement or any other Loan Document which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.


 


Section 15.17         Counterparts.  This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.


 


Section 15.18         Reproduction
of Documents.  This Agreement, each
of the Loan Documents and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by the Administrative Agent or any
Lender, and (c) financial statements, certificates and other information
previously or hereafter furnished to the Administrative Agent or any Lender,
may be reproduced by the Administrative Agent or such Lender by any
photographic, photostatic, microfilm, microcard, miniature photographic or
other similar process and such Person may destroy any original document so
produced.  Each party hereto stipulates
that, to the extent permitted by Applicable Law, any such reproduction shall be
as admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original shall be in existence and whether or
not such reproduction was made by the Administrative Agent or such Lender in
the regular course of business), and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.


 


105

















 


Section 15.19         Pro-Rata
Participation.


 


(a)           Each Lender agrees that if, as a
result of the exercise of a right of setoff, banker’s lien or counterclaim or
other similar right or the receipt of a secured claim it receives any payment
in respect of the Secured Obligations, it shall promptly notify the
Administrative Agent thereof (and the Administrative Agent shall promptly
notify the other Lenders).  If, as a
result of such payment, such Lender receives a greater percentage of the
Secured Obligations owed to it under this Agreement than its Proportionate
Share of the Secured Obligations, such Lender shall purchase a participation
(which it shall be deemed to have purchased simultaneously upon the receipt of
such payment) in the Secured Obligations then held by such other Lenders so
that all such recoveries of principal and interest with respect to all Secured
Obligations owed to each Lender shall be pro rata on the basis of its
respective amount of the Secured Obligations owed to all Lenders, provided that if all or part of such
proportionately greater payment received by such purchasing Lender is
thereafter recovered by or on behalf of the Borrower from such Lender, such
purchase shall be rescinded and the purchase price paid for such participation
shall be returned to such Lender to the extent of such recovery, but without
interest.


 


(b)           Each Lender which receives such a
secured claim shall, to the extent practicable, exercise its rights in respect
of such secured claim in a manner consistent with the rights of the Lenders
entitled under this Section 15.19 to
share in the benefits of any recovery on such secured claim.  The Borrower expressly consents to the
foregoing arrangements and agrees that any holder of a participation in any
Secured Obligation so purchased or otherwise acquired of which the Borrower has
received notice may exercise any and all rights of banker’s lien, set-off or
counterclaim with respect to any and all monies owing by the Borrower to such
holder as fully as if such holder were a holder of such Secured Obligation in
the amount of the participation held by such holder.


 


106

















 


IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their duly authorized officers in several
counterparts all as of the day and year first written above.


 


	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  SYRATECH CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:   /s/ Gregory W. Hunt

  	
   

  
	
   

  	
  Name:  Gregory W. Hunt

  
	
   

  	
  Title:  Senior Vice President
  and CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADMINISTRATIVE AGENT:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A. 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /s/ Andrew A.
  Doherty

  	
   

  
	
   

  	
  Name: Andrew A. Doherty

  
	
   

  	
  Title:  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDERS:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  /s/ Andrew A. Doherty

  	
   

  
	
   

  	
  Name:  Andrew A. Doherty  

  
	
   

  	
  Title:  Vice President

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  600 Peachtree Street,
  N.E.

  13th Floor

  Atlanta, Georgia 30308

  ATTN:  Andrew A. Doherty

  Facsimile:  (404) 607-6439

  
						



 


107

















 


	
   

  	
  CONGRESS FINANCIAL
  CORPORATION 

  (SOUTHWEST)  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  /s/ Paul Truax

  	
   

  
	
   

  	
  Name:  Paul Truax

  
	
   

  	
  Title:  Vice President

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  1201 Main Street

  Suite 1625

  Dallas, TX 75202

  
				



 


108

















 


ANNEX A


 


COMMITMENTS


 


	
  Lender

  	
   

  	
  Commitment

  	
   

  	
  Commitment

  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  35,000,000

  	
   

  	
  50

  	
  %

  
	
  Congress Financial Corporation (Southwest)

  	
   

  	
  $

  	
  35,000,000

  	
   

  	
  50

  	
  %

  
	
  TOTAL

  	
   

  	
  $

  	
  70,000,000.00

  	
   

  	
  100.000

  	
  %